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Mayor Barbara Volk signs development agreement to turn the historic Grey Hosiery Mill into a boutique hotel. Mayor Barbara Volk signs development agreement to turn the historic Grey Hosiery Mill into a boutique hotel.

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The Hendersonville City Council on Thursday approved a development agreement that will result if things go as planned in a small hotel and event space in the historic Grey Hosiery Mill by the fall of 2019.

Council members breathed a public sigh of relief after the vote, which seems to have culminated at least 10 years of efforts to develop the 1915 industrial building. Councilman Steve Caraker said he had made redevelopment of the historic mill building a goal since he was first elected to the council 10 years ago.

“I also think it will be worth all the 10 years of trial and tribulation," Caraker said.

The city closed on the sale of the historic factory and 2.3-acre site last week to Grey Mill Venture LLC, a subsidiary of Belmont Sayre, which the City Council selected as developer for the project last summer.

The agreement spells out the developer’s obligations to invest around $8 million on an adaptive reuse that would transform the 102-year-old brick structure into a hotel with 57 rooms and 2,100 square feet of event space. Under the contract, the city commits to streetscape improvements on Fourth Avenue East from North Grove Street to North Main Street.

Councilman Jeff Miller said the tax reform bill that Congress passed and President Trump signed just before Christmas initially scrapped historic renovation tax credits that make the project doable. He credited U.S. Rep. Mark Meadows for inserting language into the bill that saved the tax credits.

"This whole thing was going to go down in flames," Miller said. "Congressman Meadows called and asked for all the details that had to be in there and went over and worked on the Senate side to make sure we didn’t lose this. I'm not putting a partisan issue  in it but I think you ought to thank someone when they’ve done something. ... We came this close to being totally whacked."

Councilman Jerry Smith said that he had heard plenty about the mill throughout his eight years on the council. His usual answer: "You’re right. Something should’ve happened by now."

He also thanked city staffers who worked through the Christmas holidays tweaking the complicated and legally precise agreement so the sale could close before Jan. 1.

Among the sweeteners for the developer is a $500,000 community development block grant that will become a forgivable loan to Belmont Sayre if it meets job creation targets.

The agreement requires the developer to start project development by June 30 of this year, start construction by Jan. 1, 2019, and “use commercially reasonable best efforts” to complete the hotel by Oct. 1, 2019. The hotel also must display historical photos of the mill and text describing its history in a convenient and accessible place within the hotel. The city agrees to streetscape improvements for two blocks of Fourth Avenue East including pedestrian level lighting, enhanced crosswalks and improved sidewalks.

Belmont Sayre’s proposal for a 57-room boutique hotel and an event space for 70 people hotel fell short of the City Council’s vision of a 130-room facility with meeting space for 300 people. But the Carrboro group’s proposal matched the council’s criteria better than those of other bidders.

Built in 1915, the mill added additions in 1919 and 1947 before it ceased operating in 1967. The city bought the mill building in 1990 and added an adjoining lot in May 2007, the Williams property on Oct. 20, 2016, and the Pilgrim property on March 17, 2017, for a total of 2.28 acres. The Grey Mill development benefits the public by integrating the historic mill property with Main Street and the Historic Seventh Avenue District, the agreement says.