The owners of Cone Denim Entertainment Center argue that a parking lease on property acquired by the city of Greensboro for a parking deck project creates a liability that could force the city to pay out millions in damages. But the city attorney says the parking lease was automatically terminated with the sale, and is recommending that city council authorize a condemnation proceeding.
Greensboro City Attorney Tom Carruthers said he’s not accustomed to conducting legal negotiations in public, but if that’s the way club owner Rocco Scarfone wants it, then so be it.
Along with Mayor Nancy Vaughan and City Manager Jim Westmoreland, Carruthers fielded angry questions from a crowd at the International Civil Rights Center & Museum on Tuesday evening. The event was billed as a drop-in information session for residents to look at plans and chat with staff, but they demanded an audience with city council and the city manager.
Mostly members of the progressive group Democracy Greensboro, the primary objection of those who showed up for the meeting was that the city’s plans to build two $28 million downtown parking decks amounts to a “sweepstakes” bonanza for local developers. But the revelation that the city paid $1.2 million for property for one of the decks that is encumbered with an easement gave them a new arrow for their quiver.
“If we will put the people first — the people, 20 percent of whom are living in poverty, 20 percent who are a few paychecks away from foreclosure — if we put the people first, they will lift up downtown,” said Dave Dalton of Democracy Greensboro. “They will lift up districts 1, 2, 3, 4 and 5. Put the people first, and the economic development will follow. Put the downtown parking garages first, and all’s you have is trickle-down economics.”
Then Dalton asked officials how the city is going to cover the cost of buying out Cone Denim Entertainment Center, Scarfone’s live music venue. Scarfone contends through his lawyer Amiel Rossabi that the city-owned parking deck will make it impossible for touring acts to load in at the back of the club, and the project will effectively put him out of business.
“We will acquire the easement for fair-market value by condemnation should council direct us to do that,” Carruthers said. “That is perfectly permitted under the law for enterprises when we are moving forward in the public interest. And in this case, in my opinion, we are.”
Carruthers wanted to set one thing straight. When the city purchased the parking lot behind Cone Denim on June 28, staff was well aware that it came with an easement. The 8.5-foot wide easement makes a beeline from Cone Denim’s back door across the footprint of the future parking garage to Davie Street.
“It’s very common for cities to acquire easements and eliminate easements,” he told the audience at the civil rights museum.
Rossabi has warned that if city council proceeds with a scheduled vote on Dec. 19 to appropriate $28 million to build the parking deck, Scarfone and co-owner Jeff Furr will go to court to try to get a restraining order. Rossabi hinted in a Dec. 7 email to Carruthers, Vaughan and Westmoreland that the process could be costly.
“To summarize: a) the real estate, alone, is worth $3.2 million (expert testimony of [former mayor Robbie Perkins); plus b) an additional $500,000-$700,000 in [furniture, fixtures and other equipment]; plus c) the lost business income that we anticipate from the proposed Westin development,” Rossabi wrote. “Obviously, we have not had time to retain an expert witness with respect to the lost business income, but we are in the process of gathering such information. Moreover, under existing law, if you begin construction and our injunction is not successful (which we believe it will be), our damages are not the loss of the easement, alone. Instead, our damages are the loss of the entire venue because the use of the easement is inextricably intertwined with the operation of the facility.”
Cone Denim contends that its ability to operate its business depends on touring acts being able to maneuver tour buses, sometimes with trailers in tow, to the back of the venue. The city has offered to create an 18-foot wide alley that empties onto East Market Street for Cone Denim and other businesses that front onto South Elm Street. Considering that the alley will be one-way, a tour bus would need to be backed into the space from East Market Street — a maneuver Scarfone and his associates say is not viable for the typical driver.
Carruthers said the city has offered to make numerous accommodations, and he disputes Rossabi’s assertion that the new parking deck will put Cone Denim out of business. One, he said the city has offered to designate a berth in the new parking deck for tour buses and trailers, with a lift so that crew can easily transport gear into the club. He acknowledged that during construction touring acts will have to use the proposed alley, but Carruthers said notwithstanding Cone Denim’s argument otherwise, the city’s engineers have determined that tour buses can maneuver in and out.
Cone Denim has also raised concerns about fire access. A Dec. 7 report commissioned by Rossabi’s law firm said the International Fire Code requires fire trucks to get within 150 feet of the venue. Carruthers said the city has committed to ensure that Cone Denim remains in compliance by running a so-called “dry line” that would allow a fire truck to pipe in water from one of the adjacent streets.
Cone Denim has also argued that the city’s plan would compromise the safety of its patrons and staff. The venue has a capacity of 850 and Rossabi raised the specter of an emergency evacuation in tandem with the Limelight nightclub two doors down, with panicking patrons stampeding past the parked tour bus.
“The extra time that we spend now is nothing compared with the horror, trauma and potential loss of life that may be experienced during a fire at CDEC or any of the adjacent buildings and the ensuing panic caused by ‘tight’ conditions in the alleyway that the new Westin development and Davie Street parking deck will create,” Rossabi wrote.
Carruthers said the city is concerned about safety, too, adding that there will be an “exit discharge path” from Cone Denim to February One Place that’s wide enough to accommodate foot traffic.
Carruthers said Cone Denim’s easement on the property purchased by the city and a shared parking agreement between the venue and the previous owner have been conflated in the negotiations. While the easement provides access, the parking agreement allows tour buses to be stationed behind the venue during concerts.
Rossabi wrote in a letter recently released to city council members that “the principals behind the purchase… failed to inform city council about Cone Denim’s rights to use the back-parking lot (something easily learned through a simple title search) and how the parking deck would affect and irreparably harm Cone Denim and the landlord.” Rossabi has also said that Cone Denim recently extended the shared parking agreement through late 2019.
Carruthers disputed the notion that the shared parking agreement imposes any kind of hidden liability on the city’s newly acquired parking lot. While the city is offering $45,000 to buy out the easement, Carruthers is essentially saying tough luck on the parking agreement. “Cone Denim’s tenant [the business] had a lease to use the parking lot,” Carruthers said. “The parking lot lease terminates if the property is sold or redeveloped.”
The investors behind the planned Westin hotel that will use the parking deck included two of the same principals — businessman Randall Kaplan and lawyer George House — behind a proposed deal that fell through in 2013 because council members balked at a request for incentives for a lesser amount than the $28 million cost of the parking deck on the agenda for Dec. 19. Zack Matheny, then a member of city council and now president of booster organization Downtown Greensboro Inc., was one of the most vocal opponents of the previous deal.
At the end of Mayor Vaughan’s public forum in the auditorium at the civil rights museum, a man in the audience asked a pointed question.
“In 2013, the ask was $7.1 million for a parking deck,” he said. “Now, it’s $28 million. Back then, in 2013 [you’re] on record saying that you’re opposed to it. And now you’re for it, and the tax is even more to the taxpayer. My question is what helped change your mind?”
“One, we’re gonna own it and get all the revenue, which is the biggest difference,” Vaughan said. “And the need for parking increases every day.”
Standing in the back of the auditorium, Matheny chimed in.
“I agree,” he said.