Lacking Council support, developer pulls Flatiron hotel proposal

NO GO: Wyatt Stevens, attorney for the Flatiron Building hotel conversion proposal, pulled the project from Asheville City Council’s agenda after learning that a majority of Council members did not support the plan. Photo by Brooke Randle

Following a contentious showdown among Flatiron Building owner Russell Thomas, developer Phillip Woollcott and droves of residents and business owners opposed to the historic building’s conversion from office space into a boutique hotel, the developer’s attorney, Wyatt Stevens, pulled the project from Asheville City Council’s agenda after a majority of Council members voiced their lack of support during a May 14 meeting.  

“Madame Mayor, I can do the math, so we will withdraw the application at this time,” Stevens said. “I hope that in the interim something doesn’t happen; I hope that [the building] continues to serve well, as it has. I know that Russell will do his part to make sure that happens. But at least for tonight, we do not need a vote.”

Around 100 people attended the nearly five-hour meeting, during which 27 speakers declared both resistance and support for the project during public comment. Many opponents of the proposal expressed frustration over what they described as unbridled hotel growth and development, especially in the city’s downtown corridor.

“When will it stop? When downtown is one giant hotel?” asked downtown business owner Elizabeth Schell. “Another hotel is just not needed in this location and would in fact be a detriment. Not only will the small businesses and practitioners in the building be displaced, but it also means that locals have yet another reason not to come downtown. And that neither helps our local community nor our local economy.”

Nearly every speaker, regardless of position, argued for the preservation of the historic building. Several echoed the developers, who have claimed that hotel conversion is the only way to pay for much needed repairs and updates that would maintain the building’s integrity.

“There have been leaks in the building for at least a decade that haven’t been addressed. The Flatiron isn’t sprinklered. The existing elevators are not ADA-compliant. This is an eight-story building, and there are no areas of rescue assistance for people with mobility issues in case of fire,” said Karen Ramshaw, vice president of Public Interest Projects. “Unless there is also a massive fundraising effort to repair and rehab the building, all you’re doing is kicking the can down the road.”

Other speakers, including Downtown Commission member Andrew Fletcher, suggested that approving the conversion — and its subsequent displacement of roughly 70 current tenants — would show that Council valued tourists over residents.

“If you don’t value the existing uses of a building, you’re not valuing the existing users. And that’s us, people like me, people who live here and vote here,” Fletcher said. “Your vote tonight is going to show your values, what things you choose to prioritize and who you find to be expendable.”

Despite the prospect of having to relocate, some longtime Flatiron tenants showed their support for the project. Michael Faulkner, a social work therapist whose business has occupied the building for 30 years, said that he backs Thomas’ decision to change the building to the most profitable use.

“Everything has a beginning, a middle and an end. This Flatiron building will stay; it will survive. Look at Charleston, look at Savannah, look at New Orleans. Those are historic communities, historic downtowns, and they thrive,” Faulkner said. “Nobody wants to leave, but we honor Russell, we honor downtown, and we honor the right to make money and to move on.”

After the public comment portion of the hearing, Council member Vijay Kapoor read a statement  in support of the project, which he characterized as consistent with the city’s comprehensive plan.

“As Council members, we need to make a lot of tough choices, and the Flatiron Building decision is certainly one of them,” Kapoor said. “We can’t just reject projects because we don’t like them; that would be arbitrary and capricious. We need to have legitimate and legal reasons for doing so.”

Addressing community concerns that the project would aggravate an already difficult downtown parking situation, Kapoor pointed to a traffic engineer’s assessment that showed the change of use would likely decrease congestion. Despite the density of hotels in the area, Kapoor also noted that Woollcott’s plan to update the building’s aging elevators, install a sprinkler system and add a historic preservation easement distinguished the project from other hotel bids.  

Following Kapoor’s remarks, Council member Julie Mayfield said she supported the developer’s emphasis on building an Asheville-based team, adaptive reuse of the building and historical preservation. However, she disagreed with the displacement of local businesses and found the proposed loading zone and off-site parking problematic.

Ultimately, Mayfield declared her opposition to the project, aligning with community members who had expressed concern over the impact of growth and change on the overall character of the city.

“This building is not only almost physically, but spiritually and emotionally for people — and myself included — the spiritual center of our city. It is, I think, the soul of our city,” Mayfield said. “I would want the developer to look at other options. I have suggested that they do that sort of what I call the ‘Asheville way,’ which is pulling together people who don’t agree with you and trying to find a path forward.”

Council members Sheneika Smith, Brian Haynes and Keith Young also voiced their opposition to the proposal, citing the abundance of downtown hotels, gentrification, loss of parking and displacement of current tenants. Vice Mayor Gwen Wisler did not comment on the project during the meeting and did not respond to Xpress requests for her reactions by press time.

While Mayor Esther Manheimer did not specify her position, she said that some residents who passionately support preserving the building today might not have invested in the building just decades earlier, before Asheville became a tourism hub.

“I feel like there are all of these people who did take a chance on Asheville a really long time ago, when to buy a building like the Flatiron Building seemed crazy. It doesn’t seem superfair to the people who made those early investments not to let them make the most of it,” Manheimer said.

“I do think about the people that did that, and I’m sure to them it feels like a bit of a slap in the face,” the mayor continued. “But I’m hearing you all. I think where we’re at in Asheville is ready to have a very serious conversation about our future and trying to make the right decisions for our community.”

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21 thoughts on “Lacking Council support, developer pulls Flatiron hotel proposal

  1. Enlightened Enigma

    So maybe the owner and developer forgot to offer up the mandatory $500,000 fleece forthe ‘affordable housing trust fund’…maybe that’s the problem…again…

    • Lulz

      LOL the dimwits are celebrating because they saved a building from modernization. If the flatiron catches on fire, AFD won’t be able to put it out. Unbelievable that an 8 story building has no sprinklers. What person wants an office in a building where they might possibly be trapped in during such an event?

    • luther blissett

      Or maybe the owner and developer were economical with the truth about the availability of comparable office space for displaced small businesses, about the parking and loading provisions, and about the whole “preservation” spiel for a building the owner has maintained like a beater car.

      Can’t wait for you to run for City Council on that vote-winning “demolish public housing, merge school districts and evict small businesses” platform.

  2. jonathan wainscott

    Julie Mayfield said this one was being rejected for the exact same reasons as the Embassy Suites proposal for the site of the old Buncombe Sheriff’s office. Of course the developers in that case successfully sued the City, which in turn unsuccessfully appealed, and now it’s going to the NC Supreme Court.
    The applicant withdrew the request for the the Flatiron renovation after four Council members said they’d vote NO, and said they’d consider Mayfield’s remarks. Not sure if that was in reference to her saying that the preservation of the building and its use should get some financial assistance from the city, or that this rejection is ripe for a law suit.

    • luther blissett

      The Embassy Suites proposal was adjudicated under the old quasi-judicial process that no longer applies.

      If the Flatiron developer were forced to justify in court those assertions about available comparable office space downtown or parking demands or the usage of the loading area, I’m not sure how well they’d stand up.

      And Wyatt Stevens’s words at the end of the hearing — that he hoped nothing bad would happen to the Flatiron in the meantime — carried a certain amount of menace. Perhaps he just chose his phrasing poorly.

  3. Robin

    From my understanding, Mr. Thomas was an early investor in downtown Asheville. He took over the Flat Iron Building when Ashville was in dire need of investors to take a chance on downtown. Now that Asheville downtown is booming, Asheville City Council is telling Mr. Thomas; thanks for your investment, but we’re not going to let you maximize your return. What message does that send to future investors in Asheville’s neighborhoods?

    What about the folks investing in the River Arts District? When it comes time to sell and move on, is the Asheville City Council going to bow to political pressure and not support them?

    City Council’s actions should make anyone considering investing in a building, property, or project in Asheville second guess that decision. It seems that down the road, your dream may be derailed because Asheville has just “too many”: insert your villainous project here. Today it’s hotels, for the past few years it was box stores, and in years past it was neighborhood pharmacies (remember the CVS on Orange Street).

    I also wonder, as mentioned in another comment, if the project could have garnered additional votes by offering the accustomed “affordable housing” bribe to the City?

    • luther blissett

      “Now that Asheville downtown is booming, Asheville City Council is telling Mr. Thomas; thanks for your investment, but we’re not going to let you maximize your return.”

      Your understanding is lacking. What’s that definition of chutzpah? Oh yeah, it’s killing your parents and seeking clemency because you’re an orphan. “Investing” in historic buildings requires more than merely owning them and collecting rent. It requires proper upkeep. It’s chutzpah to dump the externalities of “preservation” onto the city — parking demands, Wall Street traffic, the displacement of small businesses — to maximize your return.

      (Compare and contrast to what Julian Price did with the Public Service Building.)

      If you’re a property investor / developer and want to endear yourself to the city, build a bunch of small offices and rent them at $500 a month.

      • Robin

        Sorry Luther, by “investing” I meant: buying in an area when others were running away (just like Julian Price was doing at the time) and hoping that you can see a return on your investment. Julian’s return expectations were more philanthropic, but the same expectation is that you hope you can do better down the road than when you first bought.

        I knew Julian Price, I considered Meg a friend. I also know Russell Thomas, and like Julian; Russell has been reliable and respectable to those he worked with downtown. Where you and I differ is that I disagree that Council should have the authority to force (or extort) prospective developers to play their “affordable” shell game. I don’t necessarily want the Flat Iron building office space to go away, but I absolutely support Mr. Thomas right to do whatever he wishes with his building, as long as it complies with the City’s rules to do so.

        You probably weren’t here in the 1980s and early 90s, but I can tell you that it probably took Mr. Thomas (and others) significant courage to invest in the whino, porno, and prostitute infested downtown Asheville. Julian Price was probably less so courageous, as he had a significantly larger cushion to begin from.

        • luther blissett

          “I absolutely support Mr. Thomas right to do whatever he wishes with his building, as long as it complies with the City’s rules to do so.”

          The City’s rules are that the proposed change of use requires conditional zoning approval.

          ‘Where you and I differ is that I disagree that Council should have the authority to force (or extort) prospective developers to play their “affordable” shell game.’

          See, that’s where you’re mistaken: I think the affordable housing trust fund is stupid — and opposed that particular bond measure — and that if Council wants more affordable housing it should build it and rent it out. And perhaps the city ought to build offices and rent them out, given that Julian Price is no longer with us and developers are no longer willing or able to match demand with supply. Or offer to buy the Flatiron at an appropriate price for a fixer-upper.

          The role of government is to address where market forces consistently — and structurally — fail residents. To reiterate: the Flatiron business tenants are paying more than those in the Public Service Building. Please identify 70 comparable vacant spaces in the county — not even in terms of rent or location, but in terms of self-contained square footage. Heck, I’ll give you the points if you can identify ten.

        • SpareChange

          Let’s stop framing this is such dramatic “prosper or ruin” terms. Kudos to the owners for investing in the Flatiron building to begin with. As these things go, given how depressed property values were, Midtown Development Associates did not get a bad deal, and given that the market was at rock bottom, it was not the biggest risk. They purchased the Flatiron for what is now the price of a modest 2 or 3 bedroom cottage in Montford. They spent considerably more on some improvements, and presumably they have covered expenses and made money over the years. Last year it was put on the market for $16 million, which if sold would be a 3,200+% return on the purchase price. It didn’t and likely would not sell for that, but if sold at even half that price one might still be hard pressed to lament their situation. To further cast things in a way to suggest that a hotel is the only possible option for this building’s future is just not credible. So, let’s put the crying towels away as we realize how valuable that property is, with or without a hotel, and that no one who invests in property, especially in historic buildings and business property, is guaranteed even a profitable exit, much less one which absolutely assures top dollar. People are looking to invest in Asheville. The City Council not being ready to approve this one particular proposal is hardly the end of things.

          • Lulz

            LOL well OK but if someone buys it and keeps it office spaces, do you honestly believe the rents will be the same? Doubtful and then those tenants leave ANYWAY lulz.

  4. “Wyatt Stevens, pulled the project from Asheville City Council’s agenda”

    Not exactly true. The proposal was on the agenda, it was heard and was fully deliberated. And the heads in opposition were counted.

    Perhaps it would be useful for the author to explain why the developer withdrew his application prior to a vote on the preservation proposal rather than just proceed to a NO vote.

    • Mike

      Probably for the same reason the developers of the hotel across the street from the old Mathews ford pulled theirs when it was going down in October.. Then after “some money” went “some where” they resubmitted the SAME proposal in March and lo and behold it PASSED.

      • Yes. They were not required to re-apply (which would obtain upon a NO vote by council), they re-submitted the proposal as-is without a vote and within a year, but under new conditions.

  5. OzarksRazor

    Once again, MNTXPRS fails to note a significant consideration brought forth by a community member during City Council.
    If the city and community as a whole want to preserve this building and make the needed restorations/renovations to keep this beautiful piece of Asheville history available for its longstanding unique use by Ashevillians, it is well worth looking to the BCTDA for funding.
    That organization pours millions of dollars just to advertise for more tourism when we have, generally speaking, always been a tourist destination. Being able to let Asheville take pride for supporting its own community over the thousands of one night standers that visit here would be a welcome change to the way the “hotel tax” is spent.
    I, as well as several others, appreciate what Mr. Wainscott laid out for Ms. Mayfield to take to BCTDA for consideration.

  6. Froscari

    At the Planning and Zoning meeting a list of available office space in the central business district was presented. There is over 85,000 SF of available office space for rent downtown. That’s about 3 times more than all of the offices in the entire Flatiron building. Is it the responsibility of Asheville’s taxpayers to subsidize and ensure that businesses get inexpensive office space wherever they want to locate? Is everyone willing to have their taxes raised for this effort? I’d like to drive a nicer car, live in a new house, and even have a cheaper office to work out of, but that’s not the public sector’s role to see that happens, is it? If I can’t afford any of those things, then I’m not entitled to them and no one is obligated to give them to me. There are too many people in this town that contribute very little and feel like they should get whatever they want.

    Aren’t there more pressing problems that need to be solved and areas where money should be spent than the public subsidizing offices? There are a lot of really poor people in this town that are barely surviving and it’s not because someone wants to convert the Flatiron building to a hotel.

    • luther blissett

      “There is over 85,000 SF of available office space for rent downtown.”

      This is smoke and mirrors. Please identify 70 comparable vacant spaces — that is, private self-contained offices in the 150-300 sq. ft range, not space designed for mid-to-large size companies — in downtown. If you can’t find them downtown, find them in the city; if not in the city, in the county. This isn’t even an issue of cost. unless you perversely believe that a sole-practitioner CPA or LPC ought to pay for a 3,000 sq. ft. space that can’t be subdivided, or you think that those people should just become property developers instead.

      https://www.loopnet.com/north-carolina/asheville_office-space-for-lease/

      “There are too many people in this town that contribute very little and feel like they should get whatever they want.”

      Well, that’s one way to talk about self-employed professionals whose clients are almost exclusively residents.

      • Lulz

        LOL so let me get this straight, You’ll get them to pay up on the Flatiron but not the infrastructure? Unreal.l

        • OzarksRazor

          “Infrastructure” is a VERY loose term for BCTDA.
          Let us not pretend otherwise.
          It is beneath us both.

        • OzarksRazor

          Also, I have never had an issue with the “hotel tax” being spent on LOCAL needs, like ever.
          You still funny though, “Lulz”. In fact, about the LAST thing the hotel tax should be paying for is more bloody advertising. Its a gross misuse of funds for a city that is widely known as a tourist destination.
          Spending $23 million on it a year is useless and degrading to our community.
          Deuces, mate

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