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City, Grey Mill developer finalize sale

A developer and the city of Hendersonville finalized a deal on Friday that clears the way for redevelopment of the Grey Hosiery Mill as apartments. Construction is scheduled to start Monday, city officials said.

"As of this afternoon, all property associated with the Grey Hosiery Mill has been transferred to Grey Mill Ventures, LLC. All project financing has been secured and received and all building permits have been obtained," the city said in a news release.

“The journey to redevelop the mill has been a long and arduous process to get to this point,” said Councilman Steve Caraker, who has been among the strongest advocates for the historic property renovation. “Many people doubted that we would be able to redevelop the mill. I’m proud that we stuck with it and I’m excited to see the final product in the near future.”

The City expects construction to start Monday with a completion date to occur in early 2020.

The City Council selected historic renovation specialist Belmont Sayre of Carrboro to convert the historic mill into a boutique hotel with event space in April 2017. Belmont Sayer president Ken Reiter informed the city last June that he failed to get financing hotel and instead proposed a development of 35 apartments. The council agreed to the backup plan provided he rent a portion of them at affordable rates.

Council members and city officials celebrated the clearest sign yet that preservation and renovation of the historic mill would finally become a reality. It's been a long time coming. The city acquired the property in 1990, 23 years after it last operated as a hosiery mill, and has suffered many false starts and a few failed deals. The city and other civic leaders have proposed development as a performing arts center, an artist colony and a hotel.

Last October the Hendersonville City Council  authorized a new agreement designed to ensure the renovation of the mill for 35 apartments, with seven of those guaranteed to offer affordable rent for 15 years. The closing was pushed back in December and the puchase was finally consummated on Friday afternoon.

Under the terms of the agreement, Belmont Sayer was to purchase the property for $700,000, paying $100,000 at closing; repay $250,000 more eight years from now and repay the $350,000 balance in years 9 through 15 at $50,000 a year. At any time the developer can make a balloon payment to repay the loan all at once.

The deal obligates the city to make streetscape improvements between Grove and Main streets so that apartment dwellers would have an easy and safe walk to the shops and restaurants downtown. City officials also see the mill project as an opportunity to connect North Grove Street with the Historic Seventh Avenue District.

"There are two critical things," Connet said last year. "The sale price is important but it's not as important as preserving the Grey Mill and getting a good return for the public and this project serving as a catalyst between Main Street and Seventh Avenue. The money we receive is going to be reinvested in streetscape and other public improvements.

Grey Hosiery Mill timeline

1915: Grey Hosiery Mill is built at the request of the citizens of Hendersonville to bring industrial development the town. Local people contribute $600 the effort by Captain James P. Grey and his son, James P. Grey Jr., to open the mill. The original part contained 32 knitting machines that made knee-length ribbed stockings for children. It had about 25 employees.

1919: The mill adds a brick addition extending east along Fourth Avenue.

1947: Another addition extends north of the original mill building along Grove Street.

1965: Holt Hosiery Mills Inc., of Burlington, buys Grey Hosiery.

1967: Holt Hosiery ends production and closes the mill.

May 23, 1990: City acquires the 1.7-acre mill property and 33,000 square feet of buildings.

October 2005: The nonprofit Mill Center for the Arts picks a plan by Boston architect Brian Healey for a $22 million 95,000-square-foot concert hall, theater and community center. The winning proposal, a contemporary design unpopular with many local residents, envisions demolishing the historic mill. It dies in the cradle.

May 9, 2007: City acquires an adjoining lot.

2009: The convention center feasibility study the city ordered concludes that Hendersonville is an attractive destination for convention activity but that the success of a facility hinged on the construction of an adjacent hotel.

January 2014: The City Council receives a detailed appraisal of the mill property that placed the market value at $600,000 with the buildings and $730,000 if the land were cleared.

March 2014: The City Council authorizes Preservation North Carolina to market the property with an eye towards use of historic tax credits to offset renovation costs.

Summer 2015: North Carolina Legislature dramatically restricts the state historic rehabilitation tax credit program, making an adaptive reuse less attractive to investors.

October 2015: The council, with the Tourism Development Authority pitching in $25,000, hires consultants from the UNC School of Government to evaluate the need for a downtown hotel and recruit a private developer. The consultants, the Development Finance Initiative, say the mill site is more feasible than the city-owned Dogwood lot on Church Street at Fifth Avenue.

Oct. 18, 2016: DFI presents details the hotel recruitment project. The study concludes that the Hendersonville can support a high-quality hotel downtown and that the mill property is the best site.

Oct. 20, 2016: City acquires Williams property.

Nov. 3, 2016: City Council authorizes DFI to send out a request for proposals to prospects interested in building a hotel on the mill site.

March 17, 2017: City acquires Pilgrim property.

April 7, 2017: City Council selects Carrboro-based Belmont Sayre as developer for a 57-room hotel and 2,200 square feet of event space.

December 2017: City officials successfully work with U.S. Rep. Mark Meadows to salvage historic property redevelopment tax breaks, which are in jeopardy of elimination in the tax overhaul Congress enacted.

Dec. 29, 2017: City closes on sale of mill property to Belmont Sayre for $1 million.

June 7, 2018: Ken Reiter, president of Belmont Sayre, tells the council that he could not get financing for a boutique hotel. The council endorses Reiter’s proposal for 35 apartments at rates that would be affordable for working couples and individuals. The plan would use tax credit financing available for redevelopment of historic properties.

Dec. 20, 2018: Council extends lease of property through the end of January while Reiter completes documents for financing the project.

March 8, 2019: Belmont Sayer and city close on the sale of the property for development of the apartments.