Over the coming year, the city of Asheville wants the Pack Square Conservancy to repay about $2 million the nonprofit owes the city, according to a May 14 letter from City Attorney Bob Oast. Until then, the city "cannot agree to allow the conservancy to operate or manage the park to any substantial degree." The letter also calls for an independent audit of the group's books.
Addressed to conservancy board Chair Guy Clerici, the communication came in response to a letter from the conservancy "proposing a resolution of the financial issues between the Pack Square Conservancy and the city of Asheville."
Formed in 2000 to raise money for and oversee construction of the new Pack Square Park, the conservancy has seen its share of problems. The work dragged on for five years and, at almost $17 million, came in significantly over budget; a planned pavilion has been put on hold indefinitely; and with such basics as a roof for the events stage and public restrooms still lacking, word emerged recently that the group doesn't have the funds to build them.
And now the city wants to recoup the money it put into the project. According to the letter, "$2,000,000 is an acceptable working figure," and the city wants to be paid in full by June 1, 2011, or to have "a firm commitment for such payments." As to where the money might come from, Oast notes, "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 the DOT is barred from giving money directly to a nongovernmental organization, the city has been paying the contractors and getting reimbursed by the conservancy. According to city records, however, the last payment came in January. Currently, the conservancy owes the city $1,979,939.91, though some of that money (which was payable May 13) isn't yet considered past due.
"We're all using $2 million as a working number, but work is continuing, and it could be more," Director of Administrative Services Lauren Bradley explains.
The letter also cites a number of other concerns the city wants addressed, including resolving all outstanding issues with contractors and making plans for adding public restrooms, "a feature that is important to Council." The 4,200 square foot pavilion, shelved in February due to financial and time constraints, would have included restrooms.
And to give the city's demands some teeth, the letter also sets significant consequences, noting, "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." Among other things, this means the park's planned 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 says the city is ruling out any management agreement with the nonprofit until the money issues are settled, which also limits the conservancy's ability to stage events in the park: "The city could agree to waiving event fees for conservancy fundraising events, but not for any other purpose," the letter notes.
Any payback agreement, says Oast, will have to include a review of the nonprofit's financial practices and an independent audit. City representatives, the letter notes, "would like to meet with you to discuss these matters next week."
An ongoing dialogue
According to Clerici, however, the letter is "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."
But the tone of the letter, Clerici notes, surprised him. "Bob and I talk about this several times a week. 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."
Clerici also stresses that the conservancy is audited annually, and Buncombe County has done one as well. "It was completely clean; I just don't think they were aware that we do this as a matter of course."
As for the May 28 celebration, "That was sort of a misunderstanding," he explains. "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."
The Asheville City Council had been expected to discuss the issue in closed session during its May 25 meeting and release a statement afterward, but none was forthcoming. However, it seems as if the Conservancy and the city may have worked out their differences — for now.
"My sense is that there's some positive progress forward," says Bradley. And at a May 27 meeting of the Economic Development Coalition, Mayor Terry Bellamy declared: "As mayor and as a Council, we stand behind the Pack Square Conservancy 100 percent. We're confident they'll raise the $2 million. If you'd like to make a donation, it would be very much appreciated!"
To view the full letter and other documents related to the conservancy, go to http://mountainx.com/xpressfiles.
David Forbes can be reached at email@example.com or at 251-1333, ext. 137.