A letter from City Attorney Bob Oast to the Pack Square Conservancy reveals that the city of Asheville wants the Conservancy to repay over the next year approximately $2 million that the city is owed. Until then, the city “cannot agree to allow the Conservancy to operate or manage the park to any substantial degree.” The city also wants an independent financial audit of the Conservancy.
While Asheville City Council was expected to discuss the situation in closed session at its meeting last night and make a statement afterwards, no statement was made.
“My sense is that there’s some positive progress forwards,” Director of Administrative Services Lauren Bradley tells Xpress.
The May 14 letter, obtained by Xpress, is to Conservancy Chair Guy Clerici, and says it is in response to a letter “proposing a resolution of the financial issues between the Pack Square Conservancy and the City of Asheville.”
The Conservancy effort has been beset by financial difficulties for some time. The nearly $17 million work that was done on the park took five years, and came in both over-budget and late; a planned pavilion is delayed indefinitely; and word emerged recently that the Conservancy doesn’t have the funds to build a cover for the events stage or public restrooms.
According to the letter, the city now wants payment for the funds it paid contractors for the construction. Oast writes that “$2,000,000 is an acceptable working figure” for the funds owed, and that the city wants to be paid by June 1, 2011 or have “a firm commitment for such payments.” Oast notes that “we understand that economic times are difficult, but think that the Conservancy’s fundraising efforts will be strongest and most successful in the first year.”
Because North Carolina Department of the Transportation funds were involved in the construction, and NCDOT can’t directly give money to a non-governmental organization, the city has paid the contractors and then received reimbursement from the Conservancy. However, those payments stopped in January, according to city records. Currently, the Conservancy owes the city $1,979,939.91, though some of those funds, due May 13, aren’t yet considered past due.
“We’re all using $2 million as a working number, but work is continuing, and it could be more,” Bradley says.
After the Pack Conservancy stopped paying the city at the start of the year, City Manager Gary Jackson sent a Feb. 25 letter demanding payment under the agreements signe dby “I regret that this step is necessary and trust that you, Board members, and staff understand the contract administration responsibilities require this at the current time.”
The city has a number of other issues it wants addressed, according to Oast, including resolving all issues with contractors and making plans for constructing a facility that includes public restrooms, “a feature that is important to Council.”
And, if Oast’s letter is any indication, the city is willing to withhold the Conservancy’s authority to manage the park until it gets what it wants.
“Unless and until the Conservancy’s financial commitment to the City is satisfied, the City cannot agree to allow the Conservancy to operate or manage the park to any substantial degree.” Oast’s letter explains that this means the park’s May 28 grand opening “must be re-characterized or re-styled to reflect current actual circumstances. As we have been discussing, work on the park is not complete — and importantly — the conservancy’s financial obligation to the City has not been satisfied. While an event recognizing the substantial progress made on the park and encouraging further fundraising is certainly appropriate, a grand opening or ribbon cutting is not, and Council will not participate in or recognize such an event.”
Oast mentions the city is ruling out a management agreement with the Conservancy: “the City could agree to waiving event fees for Conservancy fundraising events, but not for any other purpose.”
Any agreement about paying the city back, Oast says, will have to involve the city reviewing the Conservancy’s financial practices and an independent audit. The letter notes that city representative “would like to meet with you to discuss these matters next week.”
Clerici tells Xpress that the letter was “part of a discussion that’s been going on for quite some time… in some ways that letter is from one lawyer to another. Bob is a good friend of mine.”
However, he notes that the tone of the letter surprised him.
“Bob and I talk about this several times a week,” he says. “The last meeting we all had [after the letter was sent out] was a very cordial meeting, so I’m not sure why that tone got into the letter. I asked Bob that and he didn’t really have an answer for me.”
As for the audit, he says the conservancy does an annual third-party audit and Buncombe County has done one as well. “It was completely clean, I just don’t think they [the city] were aware that we do this as a matter of course.”
As for the celebrations on Friday, Clerici says they will be dubbed a “milestone,” as the city requested.
“That was sort of a misunderstanding, we’re now calling it a ‘milestone’ because we’re moving from the construction phase to people having activities in the park, which is what we’ll be doing forever, that’s our mission from here on out,” Clerici notes.
— David Forbes, senior reporter