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LIGHTNING EDITORIAL: Who will hold Opportunity House to account?

After a court hearing last week, Chief Resident Superior Court Judge Peter Knight took under advisement arguments that attorneys had made in the three-year-old lawsuit the Community Foundation of Henderson County brought against the Opportunity House, the formerly robust senior center that is staying afloat as a commercial landlord.

The foundation filed the lawsuit in December 2018 after months of futile efforts to get answers to basic questions about the center’s activities and finances. The lawsuit asks the court to declare after hearing evidence whether the Opportunity House is operating legally as a nonprofit. It also seeks to protect the foundation’s role as the potential receiver of the assets — chiefly the building, currently valued on the tax rolls at $1.9 million.
As Community Foundation president and CEO McCray Benson said at the time, the foundation has a right and a duty to ascertain the Opp House’s legitimacy because it was giving the center an annual — albeit small — donation and because of the paragraph in the Opp House charter designating the foundation as owner of the assets in a dissolution.
Arguing for the Opportunity House’s latest motion to dismiss last week, Edward L. Bleynat Jr. told Judge Knight that the Community Foundation lacks standing to sue his client, given that his client’s three-member board had foresworn the foundation’s annual donation and amended the charter to delete the reference to the foundation’s role as receiver of the assets.
“It’s deja vu all over again,” Steve Grabenstein, the attorney for the Community Foundation, said as soon as Bleynat sat down. “The argument presented today and the reasons he’s citing are the very same arguments and the very same issues that were rejected by this court in the summer of 2019.”
Indeed, Knight ruled in June 2019 against the Opp House’s first motion to dismiss (argued on that day by the second of the center’s now three attorneys). Then as now, the Opp House is basing its defense on the thin reed of what Grabenstein mocked as the “magical” charter amendment, adopted in 2019 by a board whose validity is in question. Information the plaintiff has received in discovery, Grabenstein told Judge Knight, casts doubt about how the three-member current board came to be seated and how it came to hire Ken Rhoads, in June 2016, to keep the struggling nonprofit afloat.
Under laws governing nonprofits, the IRS, the state attorney general, a nonprofit’s members or its board “can initiate judicial dissolution,” Bleynat said. “But there is no standing given by statute … for some other entity such as another not-for-profit that is not a stakeholder to bring such an action.”
The Opportunity House has gone from a membership roll of hundreds of seniors enjoying its services to zero, and the proposition that a board with total fealty to Rhoads would “initiate judicial dissolution” of the agency he presides over is laughable. State Attorney General Josh Stein should be using his subpoena power to mount an aggressive review of the Opportunity House, its finances and governance. But Stein’s office dropped the matter after writing a (not very stern) letter in the spring of 2019. That leaves the foundation as the last man standing to bring accountability to the Opportunity House, its current sketchy leadership and fishy governance.
It looks very much like that leadership hopes to skate around the lawsuit or otherwise run out the clock until it can sell the 20,000-square-foot Asheville Highway building that Rhoads now rents out to a music school, a medical transport business and cellular service business. This is not just an intramural fuss between a couple of nonprofits. At stake is a $2 million check that somebody — or several somebodies — might receive upon the sale of the property. If not the Community Foundation, who, then, will hold the Opportunity House to account?