By Andie Foley
andie.foley@salisburypost.com

On Tuesday, Aug. 7 at 5 p.m., the Salisbury City Council will hold a public hearing regarding the Empire Hotel.

The hearing will focus on a proposed master lease between the city and the hotel’s future owner, Black Point Investments.

According to Assistant City Manager Zack Kyle, the proposed lease could be likened to cosigning a loan: it’s an insurance policy of sorts, mitigating risks for the developer and owner to be.

It’s a concept based on a previous, similar mixed-use development completed by Black Point in Gastonia. There, like here, the project was financed through the United States Department of Housing and Urban Development.

True to the department name, the funds cover only the residential portion of the venture, leaving Black Point solely responsible for the commercial upfitting.

To lessen the potential risk, the city is proposing a master lease for the commercial portion of the renovated building: the first floor and mezzanine.

The lease would obligate the city for ten years should a commercial tenant default on or be unable to cover the full lease amount.

In these instances, the city will pay $12 per square foot of commercial space per year. With 13,319 square feet, this equals $159,828 per year.

Salisbury Communications Director Linda McElroy said the city is expecting the single-tenant space to be leased without issue, though potential tenants cannot be discussed at this time.

“We’re all working together to make sure that this project continues to move forward,” said McElroy, referencing the city, Black Point and the Empire’s current owner, Downtown Salisbury, Inc. “… Since we announced name of developer, we have been working to make sure this project is moving forward. We want to see this project through to the end.”

Funds for the lease will come in equal parts from the city’s combined budget for the downtown development project and Downtown Salisbury, Inc. and from existing downtown revitalization grant programs.

“Basically, we just want to make sure for all parties involved that the first floor is occupied,” said McElroy.

Kyle said that city will be contributing nothing to the development outside of the master lease. The city will have no obligation if the property is leased and paid accordingly or if the property is vacant.

“We’re just kind of guaranteeing a portion of that commercial property is leased,” said Kyle to echo McElroy.

Residents will have two additional opportunities to tour the historic hotel, learn more about the project and provide feedback at City Hall on Monday, July 30, 5:30 to 7:30 p.m. and on Thursday, Aug. 2, 8 to 10 a.m.

Once completed, the Empire Hotel initiative is expected to bring in an estimated $118,000 per year in revenue for the city, including sales and property taxes and other general fund revenue.

With a hotel sale price of $880,000, Downtown Salisbury Inc. will retain nearly $100,000, as well as save $16,000 per year in its building maintenance costs.

McElroy said the close of sale is expected in early 2019.

For more information on the Empire Hotel development project, go to www.empiresalisbury.com or contact Larissa Harper at larissa.harper@salisburync.gov or 704-638-5239.