The neighbors are up in arms about rumors that William Peace University (formerly Peace College) is interested in buying the popular Shops at Seaboard Station. The retail space has finally turned a corner with a thriving mix of shops and restaurants, becoming a community focal point in the process. The rumors allege that Peace wants to purchase the property and slowly drain it of its tenants, after which it will demolish the complex to provide space for expanding its campus.
Here’s what the Mordecai CAC had to say:
MCAC Community:
You may be hearing about some changes in the works for the Shops at Seaboard and the possibility that William Peace University is interested in buying that property. We’d like to tell you what we know, what we don’t know, and what we’re trying to find out!
1. First, WPU is requesting permission from the City Council to seek financing through the issuance of tax-exempt bonds to be issued by the Public Finance Authority located in the State of Wisconsin. As part of the process, City Council will hold a public hearing on the bonds at 2 p.m. tomorrow (Apr 16) at City Hall. According to the attorney’s memo, the educational facilities revenue bonds would not exceed $16 million, and would be used to refinance existing loans at lower interest rates, to renovate Finley and Ross Residence Halls, construct a new residence hall on campus, construct Delway Street adjacent to the campus, and other projects. (See attached memo.) These bonds, if approved, MUST be used for the purposes as stated.
2. SEPARATELY, we have been told by Seaboard merchants that WPU has expressed interest in or has actually made an offer to purchase the Shops at Seaboard. The owner is currently in bankruptcy proceedings. It is hoped that the owner can restructure his debt and keep Seaboard as is. If not, the bank is likely to sell it. We do not have confirmation from Peace officials about whether they have made such an offer or expressed interest.3. I wrote to the president of WPU last week, asking about the bonds. She explained what they would be used for. At about noon on Friday, I requested a meeting with her and Peace officials, asking that three MCAC members and Matthew Brown, representing Historic Oakwood, be allowed to attend to learn more about Peace’s long-term plans. We have not received a response yet.
4. This morning, I wrote to the president of WPU, asking directly whether it is true that Peace is making an offer for the Seaboard property. I have not heard back yet.
5. This morning, I wrote to City Councilmembers Russ Stephenson, Eugene Weeks and Mary-Ann Baldwin, telling them that we are trying to gather information about a possible Peace-Seaboard relationship. I also sent them a Facebook posting from the owner of Ace Hardware, asking customers for support in keeping the Seaboard businesses viable.
So, what we know is that Peace wants to issue bonds to refinance debt and build or upgrade existing infrastructure. This is not unusual, and businesses, institutions and homeowners do this all the time, especially when interest rates are favorable.
What we do NOT know is whether Peace, in fact, has made an offer or expressed interest in the Seaboard property. If they have, we do not know what this would mean, or whether we would have any input or participation in the process, or whether we would have any recourse through rezoning hearings or any other avenue if they do purchase the property.
At this point, we have NOT received confirmation or denial from Peace about any of this, and we have not yet received a response for our request to meet with them. Please provide any feedback or direction to MCAC leadership about what you’d like us to do in representing the MCAC publicly on this issue. Thank you!
Peace subsequently released a statement:
The Seaboard Station property is in bankruptcy and we understand that there are several parties interested in it, including William Peace University. At this time, any questions related to the purchase of the property would be best directed to Seaboard’s broker at Capital Associates.
Not exactly a soothing response, is it?
A neighborhood attorney took a look at it, too:
I’ve been doing some research on this. I’ve read some (but not all) of the court file in the bankruptcy matter and I’ve read the attorney letter for William Peace University that goes along with their bond request.
– The bond request is for refinancing old debt, maintenance of current buildings, and building on their existing campus.
– The bond request has nothing in it about purchasing Seaboard Station.
-When Seaboard first filed bankruptcy, they had manager A. Shortly after that, Manager B came on board. Manager B seems way, way, way better.
– Seaboard owes their primary lienholders (mortgagors) about $5 Million. Yikes!
– It seems like, from the paperwork I’ve seen, the bank wants to collect that money, which would mean liquidating/selling. That would preclude a work out, which is where you refinance and just come to new terms, and sometimes the bank/lender takes it in the chin a little bit since they have to recognize that the debtor is in a pinch.The property that is included includes:
518 S. West Street [not part of what we know as seaboard]
801 Halifax Street
807 Halifax Street
5 W. Franklin St.
826 W. Semart Drive.The Bad Daddy’s strip is separate and the Logan’s property is separate, although Logan’s shares parking with Seaboard.
Whatever happens, I do not think the question of selling to Peace is a sure thing. It depends upon the bank that the debtor (the LLCs that own the property) owes. I have found out that the bankruptcy judge has been hearing from tenants in court, which I did not think was the usual practice. That encourages me.
Much of the information comes from Bob King, the owner of Seaboard Ace Hardware and a tenant of Seaboard. He posted information on his store’s Facebook page:
HELP SAVE SEABOARD STATION!!! This is an urgent request for your support! There is trouble brewing for The Shops at Seaboard Station! We need the help of our community and our wonderful patrons.
What has happened, the owners of The Shops at Seaboard Station have been under Chapter 11 of the US Bankruptcy Code for the last 13 months working on a corporate restructure plan. The majority lender, Regions Bank, is trying to (1) move the proceedings to Chapter 7 to force the court to order immediate liquidation of the property or (2) dismiss the Bankruptcy and take possession of the property whereupon they will sell to William Peace University . iAttorneys for the University have been diligently working to make this happen and Regions Bank is all too willing for this to come about. This will have a far reaching impact to the downtown area and the City of Raleigh at large. There are vibrant businesses that employ approximately 200 workers in and around this center not to mention ancillary services. In addition, the loss of revenue to the City and Wake County from lost sales & use and business property tax revenues is incalculable. In exchange, there would be more dorms, activity fields & parking for additional students that historically spend little money in our fine city.
The impact to the downtown re-development efforts would be catastrophic and the substitution of a larger campus could permanently halt development in this area. William Peace University (formerly Peace College ) has demonstrated the spirit of little concern for the community through the closing of Franklin Street in the past and there is little to suspect that things will be different with the planned purchase. One needs to look no further than the neighborhoods that surround the college to get this impression.
Peace burned the community in the past with its closing of Franklin Street, claiming it was done for safety reasons. Neighbors see it differently, claiming the street closure was nothing more than a land grab so that the school could reclaim the easement and build its new buildings. The community concerns were apparently never addressed, so its no surprise there is deep mistrust over the school’s intentions.
The public hearing is at 2 PM today, when Peace will ask the City Council to bless its requeset for tax-free bonds to finance numerous “campus projects.” I’m guessing their proprosal will get an earful.
The News and Observer covered this issue with a front-page story today.