Council authorizes city to buy remainder of Empire Hotel property, appropriates up to $500,000

Salisbury City Council on March 4 authorized the city manager to sign closing documents to purchase the remainder of the Empire Hotel property from Downtown Salisbury, Inc. and approved a budget amendment appropriating up to $500,000 in fund balance for the purchase.

Downtown Development Director Seda Trappman explained the transaction and said the city’s proposed purchase would pay off the remaining loan on the property (staff cited a current payoff figure of about $413,000) and that the city would cover closing costs. Trappman said the city does not expect to need the full $500,000 appropriation and staff estimates the final payoff closer to $420,000; remaining funds would remain in fund balance.

Trappman and the presenters said the transaction would allow the city to assume Downtown Salisbury Inc.’s rights and responsibilities under the existing development agreement for the Empire Project; Downtown Salisbury’s board had approved the sale. The city’s purchase would turn future negotiations into two-party discussions (city and developer) rather than three-party and free up DSI’s budget (DSI reportedly spends about $90,000 annually on the property, including debt service).

Developers present, including Josh Barnhart and Brett Krueger, described progress on phase 1 (the Efird section) and said demolition, framing and stabilization work are underway; they said the first phase includes row homes and a retail space and that later phases will include additional residential units, hotel rooms, retail and event spaces. Trappman said the city previously authorized up to $200,000 in infrastructure reimbursements related to phase 1 and noted milestones the developers have met to continue the project.

Council voted by voice to authorize the city manager to execute the closing documents and to adopt the budget ordinance appropriating up to $500,000 from fund balance for the purchase.