The Asheville Board of Realtors spent $2.1 million recently buying a new building on Montford Avenue to house its offices. The transaction was straightforward, but it’s triggered a flood of questions from some members of the organization who say they had no idea the board had such deep reserves and that it shouldn’t be spending that much money in a down real-estate market.
Both the property deal and another recent flap—this one concerning the group’s investment portfolio—have prompted questions about the board’s financial dealings as well as calls for greater openness from an organization that some Realtors say has grown unresponsive to its members.
“Our directors of the Asheville Board of Realtors are arrogant, secretive and have not been forthcoming to the point that there’s been a loss of trust,” charges longtime member Stephen Towe of Stephen Towe & Co., an Asheville real-estate firm.
“I think the bottom line is there’s a move afoot to have better communication between directors and the board’s leadership and our members, to where our members feel that they have a vote and a voice and a say in what happens,” he continues. “From my perspective, the board has become far too secretive and far too autonomous and far too powerful.”
Board of Realtors officials, however, maintain that they’ve been open and aboveboard in all aspects of their dealings with both the group’s members and its finances, as well as in the recent property acquisition.
“I just want to make it very clear: There is nothing that anyone at the Asheville Board of Realtors is trying to hide,” proclaims Kimberly Evans, the group’s president. “It’s really distressing to myself and the majority of our members that a handful of folks in opposition have just caused so much strife,” says Evans, who owns Alpha Real Estate, a local property-management company.
Anatomy of a property transaction
The Board of Realtors finalized its purchase of the new 8,900 square foot building at 37 Montford Ave. on April 7, according to paperwork filed at the Buncombe County Register of Deeds office. The property, which sits across the street from the Asheville Chamber of Commerce, had a tax value of $846,100, records show.
The purchase was delayed by a federal investigation into the funds handled by Texas financier R. Allen Stanford. The board had about $2 million managed by the Stanford Financial Group, investments that were temporarily frozen while the Securities and Exchange Commission investigated his business dealings.
On Feb. 17, the SEC filed civil charges against Stanford and two business associates, accusing them of running an $8 billion Ponzi scheme and claiming that they were selling certificates of deposit offering “improbable” rates of return. In a Feb. 27 e-mail, Board of Realtors Treasurer/Secretary Jason Ingle told members that the board had been assured its investments weren’t part of the SEC’s investigation. Evans said the board had been working with investment brokers who changed their affiliation to the Stanford Financial Group in Asheville, but the board’s money was never put into Stanford investment vehicles.
Another longtime Board of Realtors member, Cathey M. Bailey of Biltmore Forest Realty, says she “was just flabbergasted” to learn that the Board of Realtors had accumulated cash reserves of between $2 million and $3 million. “And at the time, we didn’t know it had been put with Stanford,” she reports.
But even apart from all that, Bailey maintains that spending $2.1 million on a new building in the current real-estate market “is foolhardy. I’ve never thought it necessary.”
Evans, however, notes that the sale was approved by a vote of the group’s membership, which totals about 1,200. She also says the board has discussed finding a new location for its headquarters for years, considering everything from buying land and building to buying an existing structure.
“Space has been the primary concern. The facility has been grossly inadequate for a membership our size, especially for the last five years,” says Evans, noting that closets and bathrooms have been converted into offices and storage space. “Realtors have demonstrated that we can put our money where our mouth is, and we believe Asheville real estate is a solid investment. Any Realtor who doesn’t think it’s a good time to buy or sell ought to take a look at their career choices.”
The board bought its current headquarters at 209 E. Chestnut St. in the 1970s, later renovating it and building an addition. The group plans to sell or lease that property, and it recently began moving into its new digs on Montford Avenue.
Towe, meanwhile, says he wants to know exactly how much Board of Realtors money was invested with Stanford Financial Group and how much, if any, was lost. “I would like to know who gave the directors the authority to invest in equities, versus money-market funds” or other financial instruments.
Towe adds that while he voted in favor of the purchase, he still questions the way the decision was reached. “We don’t know what controls were in place over how the vote was done to make sure that people didn’t vote twice. We had 275 people vote out of 1,500, and we have a new building.”
Towe says he’s talked with the Board of Realtors’ attorney and had scheduled an appointment to review the group’s finances, but the meeting was canceled.
Evans explains that anyone requesting financial information must follow the procedure spelled out in the organization’s bylaws.
A call for change
Towe, Bailey and a half-dozen other group members calling themselves Realtors for Change have begun raising questions about the board’s investments, about the need for a new building, and about the group’s for-profit arm, ABR Services Inc.
ABR Services makes money publishing the Real Estate Weekly and selling access to the local Multiple Listing Service, as well as lock boxes for keys. The business also offers a service for Realtors, helping them schedule appointments to show properties.
Realtors for Change has created a Web site and is seeking more feedback from local Realtors via an online survey. (The group says it doesn’t want to publicize the Web site, because it doesn’t want just anyone filling out the survey; for details, send an e-mail to email@example.com.) They’ve also begun circulating a petition calling for a special meeting of the Board of Realtors to get those questions addressed.
“Quite honestly, I don’t know if anything is going to come of it,” says Towe, adding that he’s frustrated over the lack of information forthcoming from the Board of Realtors. “It may take some dramatic changes in leadership or how we vote for directors. But with this obfuscation, it’s not going to work out well for the people in charge,” he predicts.
In the end, however, Towe believes the organization will change. “Ultimately, the board will be a better board.”
Evans, meanwhile, notes that she’s a volunteer serving an organization “that’s near and dear to my heart”—one that she feels has been well-run over the last several years. Over the past eight years or so, Chief Executive David West has turned a struggling organization that was operating in the red into an one with proper reserves and in compliance with IRS regulations, says Evans.
She sees the board’s critics as a small but vocal minority. “I call it hiding behind the keyboard: All they want to do is insult me in e-mails,” Evans asserts. “I have a delete key on my keyboard and I use it, and that’s what I recommend to our membership. The overwhelming reaction to the building purchase has been a positive response.”
To view the deed of the sale of the Montford property to the Board of Realtors, as well as the group’s 990 tax form for fiscal year 2007, go to www.mountainx.com/xpressfiles.
Jason Sandford can be reached at 251-1333. ext. 115, or at firstname.lastname@example.org.