Today’s round of questions, my smart-aleck replies, and the real answers:
Question: You recently wrote about the Grove Arcade and a plan to possibly convert some of its space into a hotel. But it left me with some questions: Where does the rent money go that the arcade tenants pay? Does the city benefit from this? The Grove Arcade Public Market Foundation sold its lease to Altamus for $17 million? I know dormant nonprofits can avoid filing 990s. Who is behind the Grove Arcade Public Market Foundation? If Altamus is going to sell the third floor to another operator potentially to operate a hotel, does the city have clawback language in the lease? Did the city let this get away from them?
My answer: Sure you don’t want to pack 10 more pounds of questions into that five-pound sack? Also, thank you for ensuring my readers sleep well after reading all of this.
Real answer: As I reported in early April, the leaseholders at the Grove Arcade have said they will apply to the city of Asheville to convert part of the historic building into a 35-room hotel, although they have “no immediate plans.” The potential development could mean the 42 apartments currently in the Arcade would be converted into hotel rooms.
The historic, 269,000-square-foot building dominates an entire downtown block. E.W. Grove, the malaria medicine magnate who also built the Grove Park Inn in north Asheville, developed the arcade as a sort of mall, and it opened in 1929, shortly after Grove’s death. During World War II the federal government took over the building, and it became the longtime home of the federal government’s weather agency, National Weather Records Center, which vacated in 1995, according to the building’s historical website and timeline.
In 1997, the building’s website notes, “the City of Asheville acquired title to the building under the National Monument Act and signed a 198-year lease with the Grove Arcade Public Market Foundation.” The building reopened in 2002 after years of construction and renovation, with the idea that it would remain a hub of local businesses and residents.
The building has a complex ownership and management structure, as City Attorney Brad Branham told me. So any transition to a hotel or short-term rentals would be a complex process, he said previously, and it would require city approval.
Dewey Property Advisors handles leasing of the commercial property in the Arcade, while Altamus, a regional property management firm, handles residential leasing.
Regarding rents, city spokesperson Kim Miller said Altamus is the property management company, so, “Altamus would make arrangements between themselves and leaseholders to collect and disperse rent payments.
“The city is not a party in either the residential or commercial arrangements,” Miller said via email. “The only rent due to the city is governed by the primary Grove Arcade Public Market Foundation, created in 1997.”
Under the 1997 lease, which runs for 99 years with an option to renew for another 99, the primary rent for the Grove Arcade Public Market Foundation is $1 a year, Miller said. The sublessee rent is $10 a year for 99 years, with an option to renew.
Miller said the “sublessee” is Grove Arcade Asheville, LLC, the entity that essentially runs the building through Altamus and Dewey Property Advisors. City Council approved the sublease in July 2018. The initial term terminates Aug. 14, 2096, and it has the option to renew for an additional 99 years.
The lessee and sublessees are “responsible for all renovation, operating and maintenance costs,” Miller said. “The city is not responsible for these costs.”
In 1997, the foundation and the original sublessee carried out a $28 million renovation of the Grove Arcade, at their expense, Miller said, noting the renovations complied with historic preservation standards regulated by the National Park Service. Any ongoing improvements to the building also have to meet those standards.
Wes Reinhardt, president/broker with Altamus, said his company is the property manager for the Grove Arcade and runs the day-to-day building operations on behalf of the ownership. Altamus is not a principal in the Grove Arcade, he said.
“As the property manager, we collect rent, administer leases, fix facility issues, liaison with tenants, turn over units, oversee restoration and preservation efforts, monitor service providers, mitigate risk, etc.,” Reinhardt said via email. “While the Altamus offices are located at the Grove Arcade, our management team of 15 employees serve about 50 other properties throughout the region.”
Ruth Summers is the executive director of the Grove Arcade Public Market Foundation, and knows the building’s history as well as anyone.
Summers said the Public Market Foundation and the Historic Grove Arcade Development went in front of the City Council in June 2018 seeking changes to the leaseholding agreement. Historic Grove Arcade Development had run and received rents from the upper floors and had taken over the primary running of the building.
Council approved a resolution to terminate the leaseholds with Historic Grove Arcade Development and another entity, Grove Arcade Restoration, LLC, that managed and rented the first floor. (The foundation had created this LLC). The resolution gave the leasehold on the building to the newly formed Grove Arcade Asheville, LLC.
“I cannot verify the exact amount of the (settlement) sale on the leasehold, as the funds went to Historic Grove Arcade (Development),” Summers said. “Both Historic Grove Arcade (Development) and Grove Arcade Restoration were closed and their interests with the city were terminated.”
Grove Arcade Asheville, LLC, then hired Altamus to operate the Grove Arcade, which includes “contract negotiations, cleaning, security, and it collects rents and oversees and pays for all building repairs, Summers said. “The city has never received any income from the building, and the only money expended on the building was the sidewalk placement prior to opening in 2002.”
Summers said Altamus has done an “exceptional job on maintaining the building, which has recently included the repair of all of the exterior skin, major terra cotta repairs.”
“The Arcade opened in 1929 and while being an historic building, the upkeep is extremely expensive and very few contractors are familiar with some of its requirements to repair,” Summers said.
Regarding the foundation and its 990s, the forms all nonprofits have to fill out by law, Summers had an explanation for my reader not finding recent ones.
“The Grove Arcade Public Market Foundation is still active and has a volunteer board of five community members, some which have been with the organization over 20 years,” Summers told me, noting the board also has two non-voting members, a city representative and a lease holder from Northpond Partners.
The board meets twice a year via Zoom.
“I have remained as executive director and have an office in the building,” Summers said. “Since our total income is less than $50,000 annually, we are not required to submit a written 990 or full tax return. The foundation has no direct operational duties.”
The foundation’s mission is to ensure that physical alterations, repairs, or maintenance of the Arcade comply with preservation requirements of the National Park Service, the state of North Carolina, and the city of Asheville.
Lastly, while the city may not have explicitly used “clawback” language in all of these dealings, it does maintain ownership of the building, and any conversion to a hotel use or short-term rentals would require city rezoning.
“If a leasehold changes, it would be between the city, Grove Arcade Asheville, LLC, and the Foundation,” Summers said. “The Foundation still holds the master lease to the building and has since 1997.”
Whew! Quiz at noon Saturday — just for the person who sent me this question.
Question: I have a sense that this area’s police rarely pull anyone over for obviously polluting, excessive noise (radio or muffler), or driving after dark with no headlights. How can I find or request those statistics/reports?
My answer: The other day in Asheville I saw a dude on a bright orange Harley that was incredibly loud, and he actually boosted up his stereo at a stoplight so he could hear it better over the roar of the exhaust pipes. If his bike just burned coal for propulsion, he could’ve had the trifecta!
Real answer: “There have been 377 charges for noise ordinance violation or failure to burn headlamps since 2018, which amounts to approximately four to five per month,” Asheville Police Department spokesperson Samantha Booth told me via email. “Obviously, these would just be incidents that resulted in a charge, but the only way to get a count of every traffic stop that was initiated because of these conditions would require reading through call notes for every traffic stop.”
If you’d like to search this information, the best way would be the arrest and citation datasets on the police department’s Open Data Portal, Booth said. You can filter the “offense type” to look for noise ordinance violations or charges related to headlamps.
Booth said most of the information will be in the “Citation” dataset, but sometimes an arrest also includes minor offenses.
On the air pollution front, I’m always amazed at some of the vehicles I see, especially dump trucks, just pouring out heavy black diesel smoke. But I also saw a very fancy BMW sedan in north Asheville last week that was blowing out so much white smoke I thought they were electing a pope.
And the vehicle had a 30-day temporary tag on it. Great purchase! Enjoy that blown head gasket, my friend.
State law (General statute 20-128) does state, “No person shall drive a motor vehicle on a highway unless such motor vehicle is equipped with a muffler, or other exhaust system of the type installed at the time of manufacture, in good working order and in constant operation to prevent excessive or unusual noise, annoying smoke and smoke screens.”
It’s also illegal to use a “muffler cut-out” or, for vehicles made after 1967, to not have properly connected emissions control devices. These issues come into play when you go get your car inspected.
I suspect tickets are pretty rare for this, as cops generally concern themselves with more serious violations. As far as finding that pollution citation data, Booth said it would require “reading through the call notes for every traffic stop initiated to see if pollution is mentioned.”
Now, you know I love you good readers, but not that much.
Asheville Watchdog is a nonprofit news team producing stories that matter to Asheville and Buncombe County. Got a question? Send it to John Boyle atjboyle@avlwatchdog.org or 828-337-0941. His Answer Man columns appear each Tuesday and Friday. The Watchdog’s reporting is made possible by donations from the community. To show your support for this vital public service go toavlwatchdog.org/donate.
