Flatiron hotel conversion clears Council in 4-3 vote

Asheville City Council vote on Flatiron Building June 25
THE NAYS DON'T HAVE IT: Brian Haynes, Keith Young and Sheneika Smith, left to right, raise their hands in opposition to the Flatiron Building's rezoning for hotel use, which passed with support from the rest of Asheville City Council on June 25. Photo by Brooke Randle

Six weeks ago, Asheville City Council member Julie Mayfield voiced opposition to a proposal to convert downtown’s historic Flatiron Building into a boutique hotel and described the structure as the “soul of our city.” But at Council’s June 25 meeting, she flipped her position, joining Mayor Esther Manheimer, Vice Mayor Gwen Wisler and Council member Vijay Kapoor to complete a majority vote that allowed the rezoning of the building for hotel use. 

“Upon reflection, the soul of our city is not embodied in a building, even one as special as the Flatiron,” Mayfield read from a prepared statement. “Instead, it is in the beautiful, messy, complex mix of our highly engaged people and businesses who disagree and fight but who also come together and work hard on a daily basis to make our city a better place. That is the soul of this city.” 

Mayfield said that developer Philip Woollcott’s revised plan, which reduces the proposed number of hotel rooms from 80 to 71 and preserves the second floor of the building for office space, addressed concerns she had raised regarding small business displacement and parking issues. However, the project as approved will still uproot many of the Flatiron’s 70 small-business tenants. A staff report issued before the meeting also did not note any changes in the project’s plan to handle parking off-site through a valet service. 

Council members Brian Haynes and Keith Young, who sided against the project along with Sheneika Smith, sought to delay the vote, citing both procedural inaccuracies and incomplete information. Haynes claimed that because the developer’s attorney, Wyatt Stevens, had pulled the proposal before a formal vote at Council’s May 14 meeting, the project was required to go back through the city’s entire application process, including committee reviews. 

That argument was rejected by the city’s planning director, Todd Okolichany. Despite using the word “withdraw,” Okolichany said, Stevens had actually intended to “continue” the hearing so his team could revise the plan, a move that does not require additional analysis from the city’s boards and commissions.

Young cited an article from the Citizen Times — released one day before the hearing — that mentioned a 1985 Council vote awarding $800,000 in bond money to Midtown Development Association, the company that owns most of the Flatiron, for renovations. He made a motion to continue the rezoning vote to Council’s next meeting so members could gather more information about this revelation, but the motion failed 4-3 along the same voting lines as the project’s eventual approval.

Several community members also spoke out against the project during public comment, citing concerns about the impact of growth and tourism on the overall character of the city. Those opposed included downtown performer Abby Roach, better known as Abby the Spoon Lady, who said unmanaged development was driving her from the city.

“There are certain things in Asheville that kind of remind us where we are. We have bicycle taverns and big purple buses, but the thing that makes Asheville Asheville is the people that live here: our artists, our musicians,” Roach said. “The more and more Asheville grows, the more and more we’re losing them. … People are moving away, including myself. This will be my last summer here.”

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27 thoughts on “Flatiron hotel conversion clears Council in 4-3 vote

    • luther blissett

      “Yay for evicting small businesses and subsidizing property owners / developers!”

      Might as well sell off City Hall and move everyone into an office park. There’ll be a reckoning for this.

    • Lulz

      Not really. It does show what a two face Mayfield is though. The soul of “our” city is filled with backroom deals and looking the other way if someone has enough pull. It has nothing to do with what the true believers think it does. But they’ve been warned about it for years now.

  1. Gordon Smith

    Poor decision, City Council, on approving the hotelier’s rezoning request to evict dozens of small businesses in order to make room for tourists in the Flat Iron Building. Precedent is now set. Historic Preservation means you’ll approve hotels, even when they evict local businesses and provide no parking. Watch for Jackson Building Hotel, Carr Building Hotel, Miles Building Hotel, etc.

    • Enlightened Enigma

      roflmao! and what about ‘the Block’ ? You voted FOR ‘the Block’ rehab didn’t you?

  2. SpareChange

    Actually, this vote on the new “Mayfield Hotel” will continue to resonate as an issue at the ballot box for quite some time – for both Council and State Senate.

    • Lulz

      No it won’t. Problem with the people in this city is they refuse to hold democrats to any standards. Hence why they get ran over by them. Only an electorate of dimwits would vote in bonds to “improve” things while Biltmore Village gets new BRICK SIDEWALKS with a sign that says BOND MONEY AT WORK and they get empty promises. You get the government you deserve SUCKERS! You’re paying for tourism and the businesses that are making MILLIONS while you get trash pickup and nothing else. Do you people have any idea how much it costs to tear out old brick sidewalks and replace them with new for a bunch of tourists to walk on? Do you people not comprehend that you’re being stole from and lied to? Nope.

      • luther blissett

        “Problem with the people in this city is they refuse to hold democrats to any standards.”

        Please explain precisely how “the people” were meant to intervene in the month between the original hearing and this week’s vote. The last council election saw Jeremy Goldstein and Adrian Vassallo not get past the primary because they were considered too friendly to developers.

        The freedom of information request for all communications related to this decision over the past month will be interesting.

        • Lulz

          LOL please explain how 20 years of Democrat control has done for Asheville. If anything, blind support of Democrats has in fact done the opposite of what their supporters wanted LOL. Oh sure ecoli waters aside, all that has happened is concentration of wealth and gentrification. And a horribly mismatched economy paid for by many who can barely scrape by. I came very close to losing my house because of inability to pay the taxes, a hostile tax collector that would throw me out on the streets, and low pay. And now I’m told I’m rich because tax values went up lulz. Effing joke is what it is.

          • luther blissett

            LOL please explain why the peanut gallery doesn’t field candidates for elections — $75! — and if they won’t, which candidates they actually vote for. Democracy’s not a spectator sport.

      • SpareChange

        “Problem with the people in this city is…”
        “Only an electorate of dimwits would…”
        “You get the government you deserve SUCKERS!…”
        “Do you people have any idea…”
        “Do you people not comprehend…?”

        Zzzzzzzz….

        • Lulz

          LOL from tree city to beer city to inn city. LOL if you hold up your idols to any standards, why we might even progress to having a theme park. Instead of water slides, they can.put crap beer slides.

    • luther blissett

      Yep: whatever Mayfield got for her vote, it’s going to have to cover her State Senate primary.

      • Anon

        Yeah, I’m wondering how much Mayfield got paid off for her vote, too.

  3. Enlightened Enigma

    Where is council’s $500,000 extortion to affordable housing from this developer?

    • Lulz

      LOL better yet, how can they ban STRs under the guise of a lack of housing and yet approve a hotel in place of office spaces.? And ignore the lack of parking for it but make it one of their points in the antiSTR campaign? Why is one acceptable and the other not? Makes no sense.

  4. Curious

    What was the alternate plan that was economically feasible to save/rehab the building, keep the small office spaces at their current rents, and eliminate hotel rooms?

    • SpareChange

      A few thoughts, in no particular order:

      1. Let’s not just skip over the fact that the reason the building is now in such need of rehab is because for 30+ years the current owners (who purchased the building for $440k) did not invest in their own property except to nominally maintain it enough to keep it open and marginally functional. Just last year they put it on the market for $16m – which would have been a 3600% return on their initial investment. If sold for half that, it’s still a pretty nice 1800% return. Presumably they have also made money on the building over the past 30 years sufficient for them to keep it a part of their portfolio all of this time. Yet now they turn their pockets inside out, and say that the ONLY way they can renovate the building is if they receive subsidies in the form of historic preservation tax credits, and that the ONLY way they can qualify for those tax credits is to develop it into a hotel. Both claims are bogus on the face of it. At a minimum, the Council should have required a serious proposal which did not include a hotel. Instead they just caved and accepted the specious argument at face value that there was no other option.

      2. It is not the job of government to try to maximize return on investment for private sector interests. I don’t question that a hotel provides the quickest and most profitable exit strategy for the current owners — but it’s not up to government to grease those wheels.

      3. The issue of keeping the small offices, and keeping them at their current rents, while doing the rehab is of course a false standard. I know some have made it sound like that is possible, but that may be almost as naive as saying that the only possible profitable use of the building is to turn it into a hotel.
      Clearly we can’t have it both ways (renovation and the lowest possible rents). There are, however, various models which show how it can be done without hotel rooms (one right across the street at the Grove Arcade). And if the current owners lack both the vision and capital to make that happen, sell the building to someone who does possess them.

      4. At a macro level this degree of dependency on tourism and the hotel industry distorts our economy and our politics and increasingly imposes hardships on residents.

      5. Finally, a hotel is just a horrible fit in that location. There is no parking. The streets are already narrow and under a lot of stress. Residents (remember, there are residents), and many of the small business owners are increasingly feeling overwhelmed by the existence of no fewer than 3 hotels on that one short block, three more large hotels within a block or two, and another to be built soon. That will be 7 hotels in about a 2 square block area, and add an eighth when the Parisian takes shape around the corner. So, what’s next? Will the same argument be just as compelling for the old Perlman’s Furniture building? The Public Service Building? Here’s the point — if a line was not drawn here, there’s no basis for drawing it anywhere.

      • Lulz

        Exactly. And since the only thing that property can be used for per the example set forth is tourism based., therefore the STR ban also needs to be relooked at. After all why are you banning people from drinking from the same well? On top of expecting them to foot the real costs of tourism.

      • luther blissett

        The peanut gallery goes silent when asked what an appropriate rent might be for 200 sq. ft. downtown.

        We don’t know what an alternate plan would have looked like, because Mayfield got bought out and the proposal was rushed back to City Council with the mayor on a conference call. We do know that the main focus of “public input” was with whoever was financing the redevelopment, which suggests there may have been a hard cutoff of June 30 for financing.

        Oh, and for all the talk about serial criminal Marshall Kanner not being a part of the hotel deal, he’s going to get a nice check out of this.

        And yes, City Hall would make a great hotel, and based on this precedent you can imagine a 4-3 vote to sell it and move out to an office park. Everything can be cannibalized to satisfy greedy deadbeat landlords and parasitical developers.

        Like I said, the freedom of information request for all documents pertaining to the Flatiron over the past month may be interesting. And I’d like to know what the insurance policy on the Flatiron looked like in case it, y’know, accidentally caught fire thanks to all the deferred maintenance.

      • aldo

        Concerning item #3. The Grove Arcade was owned by the Federal Government and “sold” to the city for $1 in 1997. The city continues to own the building and has long term leases with two different tenants. I don’t think it’s a model for how to keep the Flatiron building from converting to a hotel. And by the way, Julian Price bought the Public Service Building and paid for the renovations before giving it to Self Help. So it’s not really a model either, unless another philanthropist of Julian’s caliber shows up.

        • SpareChange

          I understand the different history of the Grove Arcade, and you are absolutely right that it is not a “model” in the sense that it and the Flatiron face(d) identical circumstances. Clearly they do not because of the way the Arcade was effectively “given back” by the Federal Government. What I was thinking, however, is that as I understand the way the historic tax credits work, the property must be used for producing revenue in some kind of ongoing way, and the Arcade did/does this without it being hotel rooms.

          I did not suggest the Self Help building as a model. On the contrary, I was posing the question, if the Flatiron is turned into a hotel because that is supposedly the only possible use for the property that will work, what is to prevent the same rationale being accepted, seemingly without question by a majority of the Council, for the Self Help or other buildings. The bigger point I was attempting to make is that the city desperately needs a more diverse set of private sector economic players. The bottom line for me is that if at a time when Asheville might be said to be at something of a historic peak in terms of its prosperity, popularity and desirability, and it cannot attract any economic activity other than more hotel construction, then our future is very, very bleak. If now is not the time to attract a more diverse array of economic players… then when? I see that to be an important task for the City Council, and I believe they fumbled badly. I also think the players and politics involved are a bit too cute and cozy by a half.

  5. cecil bothwell

    The Grove Arcade is not a good example for a comparison, except insofar as it was successfully repurposed. The City got the Arcade for free from the federal government which had taken it over during WWII. Then Progress Energy stepped in and did the remodel, garnering huge tax credits for historic preservation, turning the downstairs into pretty high-end retail and the upstairs into very high-end condos. In terms of benefit to other businesses in town (including those in the Arcade) a hotel is very likely to generate more retail spending because that’s what tourists do.

    I’m not a big fan of hotels, but property owners do have a right to gamble. At some point tourism will go south (or more likely north to mix a metaphor – due to global warming) and the hotels will be repurposed as Section 8 Housing, like those grand old hotels the Battery Park and the Vanderbilt. Having moved here in 1980 I well recall the plywood store fronts downtown, the virtual if not actual tumbleweeds in the streets, because all the retail had died due to the Asheville Mall monster. Remember when the City invented Bele Chere to try to convince people to come downtown on AT LEAST one weekend each year?

    My sense is that the angst over this issue is a bit overdone. The building is clearly worth saving and better that it be private money than the kind of boondoggle that saved the Arcade.

    • SpareChange

      Beyond the response to aldo (above), I’ll just mention that the residences at the Arcade are not and have never been condos. They are all rental units. As for the residences being “very high-end,” each one is different, and while all are nice, and a smaller number of them are absolutely beautiful, most are perfectly serviceable 1 and 2 bedroom apartments. Not sure what you mean by it being a “boondoggle,” which by most definitions means worthless and pointless efforts in a wasted attempt to accomplish some end . Seems more of a success story given a solid occupancy rate for businesses, offices, and residences alike, and in it’s being a catalyst for the reinvigoration of that end of downtown — which by the way is a big reason why the Flatiron building is now seen as a valuable piece of property.

      • aldo

        The original plan for the Grove Arcade was to use the historic tax credits by renting the upper floors as apartments for five years, which is the time period required by the IRS, and then selling them off as condominiums. Duke Energy (formerly known as CP&L) held the lease for the apartments up until recently. As a passive investor and a large utility corporation more interested in selling electricity than being an active real estate developer, the condo conversion never happened. Doesn’t mean it won’t some day.

        I’m not sure the Arcade was a boondoggle, but I agree with Cecil that the angst about the Flatiron being a hotel is a bit overdone. Aren’t there bigger problems to solve around here? What about the recent news about gun crime being up 53%. Or the increase in opiod addiction and people dying of drug overdoses. Or homelessness. Or kids going to school hungry. Where’s the outrage or action about the continuing gentrification of the Southside and East End neighborhoods? Is it really that bad that some engineers, architects, massage therapists and attorneys have to move to another building?

        And all of the noise about the deferred maintenance on the Flatiron has me wondering how long is the city of Asheville list of deferred maintenance? What is City Council doing about all of the buildings, parks, sidewalks, streets, swimming pools and other facilities that need to be repaired or completely renovated? Is shortening that list high on Keith Young’s or Brian Haynes’ priority?

        • luther blissett

          “Is it really that bad that some engineers, architects, massage therapists and attorneys have to move to another building? ”

          Name that building. Or buildings. Like I said, if you can find 50 comparable office spaces available for rent at any price in the county, you’re allowed to treat it as an inconvenience and not the equivalent of layoffs.

          And you’re kind of missing the point: if the demands of deadbeat landlords and hoteliers are now sufficient to displace self-employed professionals who work with locals, then how do you think less well-off communities are going to fare? A city willing to gentrify away its lawyers and architects to serve the tourism gods has already told you what will happen to those lower down the income ladder.

    • luther blissett

      “better that it be private money”

      As your first paragraph states, historic preservation tax credits are not “private money.” I’m sure you know the idiomatic definition of “chutzpah.” Privatizing the profits and socializing the costs of 30 years of deferred maintenance fits pretty well.

      Perhaps you can take your morning commute to the office in your pajamas, but others can’t, and the cannibalization of professional business space has its own knock-on effects. My challenge remains open: identify 50 small office rentals currently vacant at any price in Buncombe County.

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