Grove Arcade can’t pay its debt to the city

Grove Arcade can’t pay its debt to the city-attachment0

Mountain Xpress senior news reporter David Forbes covered today’s meeting via Twitter. Here is an edited version of that coverage, which began at 3:50 pm and ended at 4:45 pm.

The committee takes up the Grove Arcade, which is struggling to make its payments on renovation debts to city, despite nearly $1 million received per year in rents for retail, office and residential space. A city staff member says that part of the problem is due to the Arcade’s ongoing maintenance problems, which includes the need for a new roof on the 80-year-old building.

Economic Development head Sam Powers says the Grove Arcade “just not able to pay its debt service” to the city.

City staff is recommending allowing sales/property tax revenue from Grove Arcade to be used to cover the debt.

Grove Arcade Treasurer Scott Hughes says, “We don’t make a profit” all the income goes to maintenance, debt service.

Grove Arcade board member Robby Russell says, “We have some concern” about our ability to pay our debt and for needed maintenance.

Grove board member Russ Martin says the Arcade is the “best deal the city’s ever gotten,” that was key in revitalizing a major part of downtown, and that the city should look at ways of helping the Arcade with its debt. He also says the arcade operates with minimal staff, so no room for cuts there.

Council member Gordon Smith says the city will “probably end up” helping the Arcade, but he wants to know what other options are available. Council member (and committee chair) Jan Davis says that, due to city obligations, “We don’t really have a lot of choices,” that the city has to help the Arcade with its debt in some fashion. “They could hand us the keys tomorrow” if the arcade goes under.

The committee decides to send the Grove Arcade-debt decision on up to City Council.

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17 thoughts on “Grove Arcade can’t pay its debt to the city

  1. Piffy!

    Gosh, who could have seen this coming? It’s not like this has ever happened, to this exact location, for more or less the exact same reasons, or anything.

  2. shadmarsh

    Dear City Council,
    I am a valued member of this community and I am having a hard time paying back my student loans. Whaddya say, help a brother out?

  3. Grove Arcade paid only $1 for that building. Now they want help with their renovation debt? What a sweet deal for them and a slap in the face to us city taxpayers. If they can’t pay their debt, then that building should be sold on the Courthouse steps at auction to the highest bidder.

  4. cwaster

    Hard for me to believe they can’t pay with rents that high. I say, sell it if you can’t pay like us “normal” people have to do.

  5. Jeff

    If they built a skate park on those north end ramps, I’d feel better about subsidizing the rich.

  6. Scotty_Mack

    Usury is immoral. Debts are even stronger than slave chains.

  7. When does this go before City Council? it’s interesting that Russ Martin was the mayor at the time the City sold the building for $1. Now he’s a Grove Board member. Coincidence? I think not.

  8. Dirk Digglar

    I hope there will be legal action taken to keep the City from buying into this private property.
    AVL needs a quick coalition of people to STOP such a takeover. This is NOT a function of city government.

  9. Joseph Barcia

    The building will not be going away and if it has new ownership surely the new owner(s) will keep it open. Consequently, Russ Martin has no clear justification for citing the building’s ability to draw business to the city as reason for using tax money for amending renovation debts. If Jan Davis is correct that the city would be “[handed] the keys tomorrow” to pay off the renovation debts the Arcade owes the city, that gives the city a good opportunity: sell it and take in the profit to alleviate the tax base. Right? Instead, the city seems disturbingly ready to agree to Martin’s plea for the city to hold the Arcade’s pitiful little hand. Why?

    I see just one major issue here worth exploring, namely what would happen to the existing businesses and facility employees in the event the arcade’s ownership were transferred to the city. Would all rental agreements and staffing arrangements stay as they are in the interim period before a new buyer came to the table? Perhaps we could see some discussion of this. Also, what is the likelihood of being able to find an able buyer on a short timeframe?

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