Special to Iredell Free News
The Statesville City Council will consider a request for approval of a Master Development Agreement (MDA) between the City of Statesville and the Rainier Group LLC for the purchase and redevelopment of the Vance Hotel during Monday night’s council meeting. The MDA lays out the terms for the next steps in redeveloping the Vance Hotel, which the city has owned since 2012.
According to the MDA, the project includes turning the Vance into an approximate 60-room hotel, along with making structural and aesthetic renovations to property such as a restaurant, bar and lobby, and renovating the parking deck to increase the number of parking spaces.
A public hearing will be held prior to Council’s discussion on the agreement so that interested persons can express their views on the project.
In 2012, the Council, citing the need for more parking and control of the redevelopment of the Vance Hotel, purchased the hotel from the estate of Thomas Wilson for $475,000. Since that time, city officials have been unsuccessful in reaching an agreement with a developer.
Stephen Barker, representing Rainier Group, expressed interest in redeveloping the hotel following the city’s purchase, but the Council instead decided to focus on converting the hotel into residential housing.
About two years ago, Barker contacted city officials and reopened conversations about his plans.
According to the proposed agreement, the City of Statesville would sell the Vance Hotel, the 47-space parking deck with lower level retail and the former Livery Building, described as a three-sided, open air building shell, for its appraised price of $47,000. The appraisal provided the current market value of these properties “as is,” taking into consideration their age, quality and condition as well as the cost to rehabilitate the building.
The City of Statesville would then pay Rainier $47,000 to purchase 20 leased parking spaces for 30 years, according to the MDA.
Mayor Costi Kutteh describes the proposed agreement as a “net zero cost to the city,” explaining that past proposals have required the city’s financial participation. One asked the City of Statesville for $2.8 million.
The agreement also gives Rainier a year, with the possibility of two 90-day extensions, to go through with its due diligence and determine if the proposal to restore the Vance as a hotel will work.
“I want to see the Vance Hotel successfully redeveloped. I am confident that its use as a hotel will energize the downtown and our economy,” said Kutteh, adding that economic benefits will include “increased occupancy tax revenues, increased rentals at the civic center, and increased commercial traffic.”
The mayor said that he realizes the reopening of the Vance Hotel may be several years away, but added that the “due diligence” period is very important in that it will allow Barker to begin cleaning up the building and get a better look at its structure and viability.
“There are no guarantees in a project of this size. Redeveloping a historic hotel is a lot harder than building one from the ground up,” Kutteh explained. He referenced a similar project in neighboring Rowan County where recently, a four-year effort by the City of Salisbury and a developer to convert the historic Empire Hotel into market-rate apartments ended unsuccessfully.