06/15/11 — Building deal, unwrapped

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Building deal, unwrapped

By Ty Johnson
Published in News on June 15, 2011 1:46 PM

With the city drawing nearer to its June 20 deadline to purchase the Arts Council of Wayne County building at 2406 E. Ash St., much has been made of the 40-year-old building, which housed two banks before becoming the heart of the area arts community in 2000.

It turns out that the city wasn't the only interested buyer while its discussions with the Arts Council were ongoing, and the building's purchase price history reveals a fluctuating cost during the two previous transactions involving the building as it changed hands from one bank to another before the Arts Council purchase.

First American Federal Savings Bank, which occupied the building until 1994, sold the structure to Centura Bank back in September 1994. After another six years of banking, Centura, while in the midst of a merger with the Royal Bank of Canada, sold the building to the Arts Council in August 2000

After a decade as the Arts Council headquarters, the organization's leadership began to look at a new location downtown, leading the building to be put up for sale.

Meanwhile, during the decade since the Arts Council purchased the building, Mayor Al King and the rest of the Goldsboro City Council had been toying with the idea of an Air Force Museum, but couldn't find a location large enough. When the Arts Council building hit the market, King said the city leadership was sold.

"Our eyes lit up," he said, adding that discussions with Seymour Johnson Air Force Base officials revealed they liked the location as well.

The building on Ash Street is near enough to the main gate of Seymour Johnson, the mayor said, for tours to facilitate between the two locations, making it a prime spot for the potential museum.

Discussions with the Arts Council began in 2010, but there was another downtown Goldsboro entity that was interested as well, wanting to restore the building to its original use.

The Little Bank, a Kinston-based financial institution, was considering moving its branch on the 200 block of Center Street to East Ash, even making an offer to the Arts Council in January 2011 -- unaware that the city was considering the building for its Air Force museum.

Roy Parker III, a senior vice president and the Goldsboro branch's city executive, said the offer that was made was considerably lower than what the city eventually offered, but different officials within the company declined to reveal the specific amount.

Parker did say, however, that as soon as the bank realized the city was interested in the location, the bank withdrew its offer, opting instead to let the city use it for a purpose that would benefit the community as a whole.

That allowed the city to begin its negotiations with the Arts Council, which began with an analysis of past selling prices for the building, property value appraisals and other considerations.

When it was first purchased by Centura, the building fetched a price of $511,500. Six years later, the Arts Council paid $300,000 for the building, and added the adjacent garden area to the west by purchasing it from Center Point Properties for $180,000 in November 2000.

But Interim City Manager Tasha Logan said an August 2010 appraisal of $685,000 factored heavily into the city's initial offer of $600,000.

"Once we got the appraisal and saw the estimated value we felt it was a fair price to pay for it."

Arts Council Director Sarah Merritt said her organization also performed substantial renovations to the structure over the years, especially in the lot that now contains the garden. That additional parcel of land acquired by the Arts Council was included in the purchase proposal.

The city wanted to have a structural engineer evaluate the building, especially since the Arts Council had expressed concerns over the costs associated with maintaining the large building on its meager budget.

"We were very much concerned about structure," King said.

The findings that substantial renovations would be needed led to the city's cancellation of the initial contract and movement toward a $500,000 contract, which is currently awaiting final approval from the City Council. A payment of $25,000 is already guaranteed for the Arts Council, thanks to a clause indicating the good-faith money as a non-refundable deposit of sorts.

"We thought it was a fair amount to pay," King said.

Ms. Logan, too, said the council was comfortable with the offer.

As for the fluctuation in price, from $511,500 to $300,000 to the city's $500,000 offer, Alice Strickland, the director of the Arts Council who oversaw the purchase, said she believed Centura Bank saw the low price as a gift to the Arts Council, although she said it was never mentioned or discussed in that manner

"No one at Centura or RBC mentioned a gift in kind or anything like that," she said. "But it may have been a factor."

And as far as the payment the Arts Council will receive if the purchase is approved, Mrs. Merritt said the funds leftover after the Arts Council's move downtown will be used to create an endowment-like fund for the organization.

"That money will go into a fund for savings to draw interest for an endowment. It will be something that most nonprofits our size don't have," she said. "That way we'll still have a nest egg."