William Peace criticized over refusal to name trustees who approved retail center purchase

dbracken@newsobserver.comJuly 5, 2013 

SEABOARD-NE-041513-TEL

Seaboard Ace Hardware employee Brandon Wilson, left, helps Jim Bray of Raleigh load mulch into his car Monday in Raleigh. William Peace University has expressed interest in buying Seaboard Station, a development that is alarming some of the retail center's tenants. The center's owners filed for bankruptcy last year after being unable to renegotiate the terms of the debt on the property.

TRAVIS LONG — tlong@newsobserver.com Buy Photo

  • Who are the trustees?

    William Peace University’s 990 filing for its 2011-12 tax year – the most recent available – lists the following individuals as trustees: Todd Robinson (chair), Beth C. Cherry (vice chair), Fay J. Anderson, Mary Davis M. Betts, Patricia Gerrick, Gerald A. (Jeb) Jeutter Jr., J. Fredrick Kelly Jr., Steven C. Lilly, R. Donavon Munford Jr., J. Stuart Phoenix, Lee A. Rast, Charles M. (Terry) Reeves III, A.B. Swindell IV, Goldie S. Byrd, Scott M. Custer, H. Terry Hutchens, Rick D. Martinez and Rev. Dr. Edward A. McLeod Jr.

    There have been some changes in the board since the filing. One new member is Kenneth Gwynn, a Raleigh real estate attorney. Martinez and Custer have confirmed they are still on the board.

— William Peace University, citing school policy, has declined to provide the names of its trustees who recently voted unanimously to invest nearly two-thirds of the school’s $33 million endowment to acquire the Seaboard Station retail center.

The policy has angered some alumni who would like to question the trustees directly about the decision to acquire Seaboard. Through its public relations firm, the university also declined a News & Observer request for a list of the trustees.

“I was told they did not release the names with no real explanation,” Michelle Lynch, who graduated from then-Peace College in 1987 and now lives in Wilmington, said in an email. “I also asked when new members were coming onto the board. No info was given.”

Beth Cherry, the Board of Trustees vice chairwoman, said in an interview that the policy has been in place for several years.

“Everything goes through the office of the president. Anyone is welcome to contact the trustees through the office of the president,” she said. “ ... It has worked very, very well for us.”

Cherry, a 1972 graduate who is now serving her third stint on the board, said she couldn’t say exactly when the policy went into effect.

“I honestly can’t answer that,” she said when asked whether it was in place before the current president, Debra Townsley, took office in 2010. “I don’t know.”

William Peace’s board contains 18 trustees, Cherry said. The university is required to list its trustees in the annual 990 disclosure forms it files with the Internal Revenue Service. The most recent filing available is for the 2011-2012 tax year.

The News & Observer confirmed that the board’s current chairman is Todd A. Robinson and that other trustees include Scott Custer, CEO of Raleigh-based VantageSouth Bank; Rick Martinez, a former news director at WPTF who is now a spokesman for Gov. Pat McCrory; and Kenneth Gwynn, a Raleigh real estate lawyer.

The trustees’ names were routinely disclosed in the past, say former members of the college’s staff.

“When I was there, we were proud of our trustees, and listed them prominently,” Michael Hobbs, former Peace College director of communications, wrote in an email. Hobbs left the college in 2010, before the arrival of Townsley as president. The policy of not publicizing trustees’ names is apparently the policy of the new regime, Hobbs said.

The deal

Seaboard has been in bankruptcy for more than year. Its current owner, Gregory & Parker, has been unable to reach an agreement with its creditors and is now being forced to sell.

William Peace has a purchase agreement to buy the 92,000-square-foot center for $20.75 million. Higher bidders could still emerge under the sale process outlined in Seaboard’s bankruptcy filings, and the sale will need to be approved by the bankruptcy judge in the case.

Lynch, who has donated money to the school in the past, said her concern is that acquiring Seaboard will put the university in a financially precarious position.

“Their ‘business’ is higher education not real estate development,” she said. “I am afraid they are taking funds for purposes not intended and will bankrupt the endowment and college.”

Cherry said previous presidents before Townsley had discussed the possibility of purchasing the Seaboard property.

“To be able to grow we need space and this is just a great way for us to have income to help us grow,” she said. “It’s a great business decision.”

Cherry reiterated that the university’s plan is to retain Seaboard’s retail space, which is now more than 90 percent leased.

The potential

Rick Martinez said the board looked “very intensely” at whether the acquisition was a good investment. The board also considered whether it was in the long-term interest of William Peace, a landlocked university that is seeking to increase its enrollment.

“That’s basically why we’ve made this investment,” said Martinez. “Because we know that probably beyond this board, beyond this president, there might be some options that a future board and a future president will have now that they’ve got land contiguous to the campus.”

Martinez said he has spoken to Townsley about how she and the university will essentially be gaining another constituency if the Seaboard acquisition is completed.

“If this purchase is successful, she’s going to have to make sure those tenants are as happy with her as the board of trustees are happy with her,” he said.

As for the university’s decision not to release the names of trustees, Martinez said the policy shouldn’t be interpreted as a sign that the board is somehow insulated from public opinion.

“I just hope that’s not used as an excuse to say that we don’t get feedback,” he said. “Because, one, we do get feedback and, two, anyone and their brother can direct a comment or a thought to the president’s office and believe me we hear it all.”

Staff writer Jane Stancill and news researcher Peggy Neal contributed.

Bracken: 919-829-4548

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