Clayton News-Star

Clayton leaders weighing risk of downtown proposal

The former ABC Plumbing building has a long list of problems.
The former ABC Plumbing building has a long list of problems.

Enticing a private developer to renovate a blighted downtown building would carry some risk. Clayton leaders agree on that much.

Where they differ is whether the risk would outweigh the possible rewards.

Clayton Town Manager Steve Biggs on Monday laid out a proposal that starts with the town selling leasing rights on a water tower on Shotwell Road. The town, which leases space on the tower to AT&T, would sell those rights to a California-based company, Black Dot Capital and Real Estate Group, for $250,000.

The town would take $150,000 from the sale and buy the former ABC Plumbing building on East Main Street. A bank now owns the building through foreclosure.

The building, which dates back to the early 1900s, has a long list of problems that engineers say will take up to $600,000 to fix. Instead of bankrolling the renovations, Clayton would use the remaining $100,000 from the lease sale to attract a private developer.

Biggs said the town would advertise the money as a grant. The hope is that a developer would pool the town’s money with his own to restore the building and apply for federal historic-preservation tax credits to get some money back.

That’s the plan, but what if a private developer doesn’t come along? Councilman Bob Satterfield said the town would own the building with no money to fix it.

“Let me ask you this simple question I’ve got,” Satterfield said to Biggs on Monday. “We have a windfall of $250,000 – cash – coming into the Town of Clayton. Is that the best place for this to go to?”

Biggs said the project would help the town address several goals, starting with economic development. In its current state, the foreclosed building isn’t marketable, Biggs said, and could affect the allure of nearby buildings if it continues to deteriorate.

Second, the town is looking for additional library space. Hocutt-Ellington Memorial Library, which has grown from 3,500 patrons to 14,000 in 20 years, is running out of room in its space about a block away from the ABC Plumbing building.

The town initially eyed the ABC Plumbing building while scouting potential sites for a library expansion. However, after several Clayton leaders took a tour earlier this year, a town-hired inspector confirmed their suspicions that the building was in worse shape than they thought.

A structural report published in June by Lysaght and Associates of Raleigh shows about $598,000 in recommended improvements, including floor replacements, interior demolition work and heating, air and electrical upgrades.

After seeing the report and getting feedback from library users, Biggs said the town began to shift its focus from extra space for the library to an economic-development project.

“The library interests are definitely secondary to concerns about the loss of an historical asset and the adverse impact it could have on marketing adjacent buildings,” Biggs said in an interview.

Main Street projects

Multiple private developers have expressed interest in the building, Biggs said. He declined to name them, saying their identities would be made public through the proposed request-for-proposals process.

Councilman Michael Grannis said the town needs to pursue those interests further.

Grannis, who owns Clayton Steakhouse near the ABC Plumbing building, said he agrees with Satterfield that a developer might not come calling. But at the end of the day, he said, how big is that risk?

“I know we are not the first municipality to talk about the possibility of entering a public-private venture,” Grannis said, adding that some towns have succeeded with such deals.

Grannis pointed to the City of Morganton, which partnered with private developers to turn an old movie theater into a seven-screen cinema.

Library needs

If the proposal moves forward, Biggs said the town could initially lease space back from the private developer for a library expansion. He said that would allow the investor time to recover some construction costs and take advantage of historic-preservation tax credits.

Clayton’s library, which is breaking away from the county network of libraries, has flourished from a growth in patrons who live outside the town limits. Councilman Art Holder, who serves on the town’s library board, said Clayton shouldn’t lose sight of what started talks about the ABC Plumbing building.

“The driving force behind the need for this building is we are busting the seams of that library,” Holder said.

Holder suggested the town use some of the $250,000 from the lease sale to add a second floor to the existing library.

“We need to look at this really close,” Holder said.