Money to buy hotel appropriated

September 9, 2009

By MICKEY POWELL - Bulletin Staff Writer

Martinsville City Council on Tuesday appropriated $95,000 toward the city’s purchase of the former Henry Hotel uptown.

The Harvest Foundation is giving the city a loan to cover the rest of the building’s $425,000 purchase price. City Attorney Eric Monday said the city likely will receive its check from the foundation on Thursday. 

Reserve funds will cover the city’s appropriation, which includes part of the purchase price and closing costs such as recording fees and insurance.

In August, the Martinsville Redevelopment and Housing Authority (MRHA) bought the building during a public auction. The city wanted some control over how the building is developed in the future as part of a revitalization planned throughout uptown, according to officials.

The MRHA is the city council seated as another panel to handle housing and redevelopment matters.

In order to legally handle the $95,000 appropriation, the council — as soon as it was called to order Tuesday night — had to declare a recess and then convene as the MRHA to request the city funds.

The request was unanimously approved.

After the request was considered, the panel had to adjourn as the authority and then reconvene as council to hold a public hearing on the city’s purchase of the building before considering approval of the $95,000 appropriation.

The appropriation was made in a unanimous vote.

What ultimately happened is that the same five elected officials who asked for the money turned around and appropriated it a few minutes later.

“It’s a legal technicality,” said Martinsville Community Development Director Wayne Knox. “It’s the same folks. They’re just wearing a different hat.”

The way state laws are written, the city will incur less liability by having the property under the MRHA’s control than under its own control, said Knox.

While the authority is part of city government, legally it and the city are considered separate entities, he said.

The four-story former hotel building, constructed of block and brick, was built in 1921. It currently is subsidized housing for 22 people, and the city plans to help those people find other housing.

“We’ll work with them one at a time” to find them suitable housing, City Manager Clarence Monday said.

He said that under federal law, their new housing must be “equal to or better than” their living space at the former hotel.

The city also will work with businesses in the building to find new spaces for them, the city manager indicated.

Officials have said the building might be redeveloped as retail space, “high-end apartments” or dormitories for New College Institute students.

The only person to make substantive comments during the public hearing was uptown resident/developer Mervyn King. He said he thinks the building would be excellent upscale apartments, perhaps for older people.

Buying the building was “a superb move” on the city’s part, King said. “I support it 100 percent.”

The city will work with the Uptown Partners coalition to develop the building to coincide with a strategic planning process under way, officials said.


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