Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Real Estate Mortgage Authorization topic
No spam. Unsubscribe anytime.
Council authorizes city to be accommodation party on mortgage to secure $5 million loan for EB White building
Summary
The Ways & Means Committee authorized the mayor to execute documents allowing the city to be an accommodation party to a mortgage on 135 Meeting Street to secure a loan to the Carolina Arts Association for the EB White building at 141 Meeting Street.
The Ways & Means Committee authorized the mayor to execute documents allowing the city to be an accommodation party to a mortgage on 135 Meeting Street to secure a loan to the Carolina Arts Association for the purchase and exterior improvements to the EB White building at 141 Meeting Street.
Committee members were told the city will not sign the loan note and will not be obligated to repay or assume any debt of the Carolina Arts Association being secured by the mortgage. The authorization is required because 135 Meeting Street is city-owned property and an ordinance is needed to permit a mortgage to encumber city-owned land.
The committee’s staff explanation said Pinnacle Bank will make a loan covering the closing and exterior renovations; the total loan amount discussed was $5,000,000. Council member Seekings said the building is currently about 6,000 square feet and will expand to roughly 8,000 square feet after an addition. Staff said the loan will not cover interior renovations, which the association expects to fund through a separate capital campaign and tax-credit financing.
Speakers noted the seller (referred to as BMOC) placed a civic-use restriction on 141 Meeting Street, which prevented the lender from taking a mortgage on that building; Pinnacle therefore requested the mortgage be placed on 135 Meeting Street. Staff explained that because the city is a co-owner of 135 Meeting Street, council approval is required to allow a mortgage on that city-owned parcel.
Committee members asked about risks if the Carolina Arts Association cannot meet debt obligations. One member said that, in practice, the association has additional assets and the bank would look to those assets; staff noted the association has a substantial art collection. Committee members acknowledged the practical possibility that, if the association defaulted, the city’s co-ownership could lead to the city stepping in, but the committee record emphasized the city will not be on the loan.
Staff said the closing is scheduled for the following day and that the bank had given the Gibbs 90 days to satisfy outstanding items, including the mayoral authorization. Staff also reported the Gibbs had contributed $1,500,000 toward the closing. A tentative timeline was discussed: exterior work on 141 Meeting Street is expected to be visible within the next 12 months, and the park portion the seller wanted completed by the holiday season is more likely to reach substantial completion in early 2026 (Q1–Q2).
The committee voted unanimously to approve the authorization.
The action clears the way for the closing and the exterior rehabilitation sequence but does not commit the city to repay the loan or sign the debt instrument.
