City agrees to rework museum loan contract

Members of the Greensboro City Council refused to forgive the balance of a $1.5 million loan ($800,000 balance), but agreed to give officials with the International Civil Rights Center and Museum (ICRCM) more time to pay up.

At a special meeting on Monday, August 1, the Greensboro City Council voted down a motion 6 to 2 to forgive the loan balance owed by the museum, with Sharon Hightower and Jamal Fox voting yes. Council members agreed to “tweak” the contract between the city and ICRCM. At-large council member Marikay Abuzuaiter was not in attendance.

A proposed resolution drafted by City Attorney Tom Carruthers states that the city will extend the fundraising period for the museum, provided that the museum hands over the property deed to the city. The F.W. Woolworth building, where the museum is located on 134 S. Elm Street, is valued at $3.8 million.

“Collateral secures the city’s interest in the museum,” said Jim Westmoreland, Greensboro City Manager.

Museum officials say they are currently working on repaying the remaining balance of the $1.5 million forgivable loan it received from the city in October 2013. According to the contract, the city agreed to “forgive” every dollar the museum raised from September 2013 to July 2015. Under the new contract, the fundraising period would be extended to February 1, 2018.

It was first reported that the museum currently owed the city more than $900,000. New calculations by the city attorney’s office significantly lowered the balance after a $100,000 credit on a loan from Carolina Bank and about $27,000 in cash donations were added.

When the remaining balance was not received, the city declared the museum in default and owed $799,148.78, the full remaining amount of the loan.
Museum leaders are calling the current quote by the city premature because their auditors are still examining the numbers.

In a phone interview with The Peacemaker, Earl Jones, ICRCM co-founder and vice-chairman of the museum’s board of directors, said, “Taxpayers’ dollars are being spent for the city staff to go through all of our documents, and that part hasn’t been completed.”

Council members Sharon Hightower and Jamal Fox agreed that the city-called meeting was premature and brought up concerns about double-standards between different entities that do business with the city.

“I don’t understand why we are even here today to discuss this when they are still in negotiations about what is owed and what is not owed,” said Hightower. “That just does not continue to create good will. We are just at a bad place and I feel we don’t do this to other entities that owe us money.”

Mike Barber, an at-large council member noted he was concerned that the museum did not bring in enough revenue to help support downtown Greensboro.
“We come to this with purity of heart to try to make it work, if for no other reason than to prevent our downtown from being diminished by a failed museum,” said Barber.

In an e-mail to The Peacemaker, John Swaine, museum CEO reiterated that the museum staff is still working with the city’s internal audit department, and are preparing to be relieved of any tax credit debt, set for August 19.

“This means that the $28 million that we brought to this community to improve the downtown area has had an impact on the community. We will have met our commitments to the investors and we are appreciative for the help that was provided by the city, for the short-term,” said Swaine.

The civil rights museum opened in 2010. The museum commemorates Greensboro’s lunchcounter sit-ins led by four freshmen students from N.C. Agricultural & Technical College: Joseph McNeil, Jibreel Khazan (nee Ezell Blair), Franklin McCain and David Richmond, who sparked a series of sit-ins when they refused to leave the “Whites only” Woolworth lunch counter.

In 2014, an offer made by Mayor Nancy Vaughan to let the city manage the museum was not received well by the museum’s founders Melvin “Skip” Alston and Earl Jones.

Doug Harris, legal counsel for ICRCM was the only representative from the museum in attendance at Monday’s meeting.

“We’ve taken this historical building and saved it,” said Harris. “That building will never be used as anything but a museum.”

City Council will revisit the issue at its Tuesday, August 16 meeting.