The Grove Arcade in downtown Asheville was created by refurbishing the old federal building with Certificates of Participation (COPs). The Grove Arcade was purchased by the City of Asheville in 1997 through the National Monuments Act. At that time, the city signed a 198-year lease with the Grove Arcade Public Market Foundation, the foundation agreeing to make annual COP payments to the city.
The arcade houses commercial space and 42 luxury apartments. It is considered to contribute to the city’s goal of “Affordable” by providing 189 jobs, 78 of which are fulltime. By some standard, city staff claims the arcade is the largest commercial building in WNC.
Merchants often tell the city they are struggling because they failed to receive the parking facility they were promised. Reasons now cited for the struggling include “capital improvements and a tough economy.” The facility needs a new roof and new terra cotta.
For the second time, the foundation would like to forego its payment to the city. The tax revenues the arcade generates for the City of Asheville and Asheville City Schools are expected to total $73,525 this year. It has been suggested that this contribution be used to offset some of the foundation’s loan repayment to the city. It is proposed that the foundation pay only $50,000 for the next five years. The original agreement required the it to pay the city $125,000 independently of any tax revenues it may generate.
The foundation originally made a principal payment to the city $125,000, then paid increasing amounts until 2007. The city’s 2010-11 budget, for some reason included no principal payment. This is viewed as justification for reducing the amount to $50,000.
City staff cautioned:
Debt load restructuring may be perceived by some citizenry as government subsidized loan restructuring because they may not fully understand the public/private partnership.
In other words, government should own businesses, leasing them to whom they wish, and helping out with public funds when they are unprofitable. Oops. I misspoke. Waiving funds and making holes in the budget to be plugged with greater contributions from other taxpayers is a totally different animal than a subsidy. One must not generalize, differentiating money into (1) mine and (2) government’s. Silly me. Yes, yes. Of course I understand.
