The Statesville City Council voted Monday evening to approve a Master Development Agreement with Rainier Group L.L.C. to redevelop the Vance Hotel.

The agreement, in which the city agrees to sell the historic but rapidly deteriorating building, calls for the Vance Hotel to be redeveloped as a hotel, restaurant and bar.

The Rainier Group, represented by Stephen Barker, started its quest to redevelop the Vance nearly ten years ago when the city first purchased the hotel from the Estate of Thomas Wilson for $475,000. City officials, rather than pursuing that venture with Barker, opted to focus on turning the Vance into apartments, but that plan never came to fruition.

Now, almost a decade later, Barker is back and again ready to proceed with a boutique hotel that would breathe new life into the Vance. But the property he sought to purchase then is very different than the one he is pursuing today, according to a recent appraisal.

“We are finally at the point of having a Master Development Agreement in front of the council,” said City Manager Ron Smith. “We have been talking to the Rainier Group L.L.C. for probably two years about a possible project to renovate the Vance Hotel into a functioning boutique hotel.”

Despite having an agreement to move the project forward, city officials had to accept that the value of the property is now a fraction of what it was when the city purchased it.

The agreement calls for the City to sell the Vance to Rainier Group for $47,000. The City will then turn around and lease parking spaces from Rainier Group for the same amount, making it a net-zero transaction.

“There was an appraisal that, as you know, came in much lower than anyone of us expected it to, although there is rationale for the amount listed,” Smith explained. “There is a decision to be made here and if we choose not to approve the first reading of this development deal, the appraisal has shown that the building is degrading at a rate that is far more than I originally expected.”

The latest appraisal, which valued the property at $47,000, is a far sight less than the $1.2 million appraisal done just a few years ago in 2017.

Allan Reich, the current appraiser, said the 2017 appraisal failed to take into consideration the actual physical state of the building.

Although the council discussed several concerns about the feasibility of the project’s success as well as the extensive due-diligence period of 545 days outlined in the agreement, the decision came down to if not this plan, then what?

“This hotel has been vacant for many years and each time we say we are going to sell her, we come to a dead end,” Councilwoman Doris Allison said during discussions. “Can we continue to let it stand without doing something? We aren’t going to have a perfect plan in place. We keep finding people who are interested, and we keep finding loopholes and keep going on and on. Is she just going to fall apart and we pick up the crumbs and get what you can for it? If we don’t decide to do this, we need to decide what we need to do then.”

Council members voted 6-2 in favor of approving the agreement.

Councilmen David Jones and William Morgan were in opposition, citing provisions within the agreement that didn’t sit well with them.

For Jones, lack of specificity of the timeline as well as ambiguity in how much the project will end up costing to complete prompted his opposition. For Morgan, as he has consistently stated since the council approved the letter of intent with Rainier, providing 545 days for due diligence remained problematic.

“We are putting ourselves in a position that it is possible that nothing can be done for 544 days, and then Rainier Group walks,” Morgan explained. “Then we are left with no options. The building will be a year and a half for the worst by this time, and it will be even less likely that it can be saved at that point. And in the meantime, it is still city owned so we will still be maintaining the building and paying for any emergency conditions that arise. That is a real problem for me.”

2 thoughts on “Statesville Council approves agreement to sell Vance Hotel to developer for $47,000

  1. James Harrington says:

    So the Council just gave away $428,000 of the taxpayers money, but can’t fix a sink hole on East Broad Street that’s been there for almost a year! Great job, City Council. You all should be in Washington, D.C., making decisions!

  2. Is this some sort of new economics? Buy high and sell low? What ties does City Council have with that developer?

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