Meridian Star

June 27, 2010

Threefoot Building: Part 1 ‘Looking at all our options’

Development, demolition and stabilization

By Jennifer Jacob Brown / jbrown@themeridianstar.com
The Meridian Star

MERIDIAN —     Since the City of Meridian first purchased the Threefoot building in 2006, it has incurred a lot of expenses — more than $2.5 million worth.

    The largest cost was the purchase of the building itself — $1.2 million plus $25,000 in closing costs. Add to that the $1 million that was paid to would-be developer HRI Properties for the cancellation of their development agreement, several years worth of insurance payments, stabilization costs, and monthly expenses such as utility bills, and you've got a pretty expensive building.

    But the Threefoot building doesn't have to be a money pit forever. There are options — and lots of them.



Mayor looked into

de-listing, demolition



    One option that Meridian Mayor Cheri Barry looked into early in her tenure was demolition, but she said Wednesday that tearing down the iconic building is not in her current plans.

    According to an e-mail written by Mississippi Heritage Trust Director David Preziosi, provided anonymously to the Meridian Star, "In September of 2009 I spoke with the Mayor about the Threefoot building after it was placed on MHT's endangered list. In that conversation, she wanted to know how to get the building removed from the National Register of Historic Places for possible demolition."

    Preziosi confirmed in a phone interview that Barry had called him to find out how to get the building de-listed.

    Barry also confirmed that she looked into it, but said she was just trying to learn about the different options available for the Threefoot building. 

    "When I called them I was strictly calling to get information," she said. "You can call them and get any information you need about saving a building or taking a building down."

    "I'm looking at all the options of what the best plan is for the City of Meridian," she added. "Nothing is off the board."

    In his e-mail, Preziosi said he advised Barry not to have the property delisted, and gave her the names of people she could talk to about funding opportunities for the Threefoot building.

    Those people, a grant administrator and a tax credit administrator with the Mississippi Department of Archives and History, said they had not heard from Barry. However, Jim Woodrick, acting director of the MDAH Historic Preservation Division, said he did have a conversation with Barry about historic preservation in general.

    Barry said her plan for right now is not to demolish the Threefoot building, but to find the funds to stabilize it, preserving it from further decay until the economy picks back up, at which time she hopes to find a developer who will invest in its renovation.

    At the time that Barry inquired about getting the building de-listed, there was a development agreement in place for the building, but not one she was happy with. New Orleans developer HRI Properties had an agreement with the city to develop the Threefoot building into a hotel. The agreement was made shortly before Barry became mayor, and was cut off shortly afterward.

    Critics of the HRI Threefoot project, which included the Barry administration, said it required too much monetary commitment on the part of the city. For the HRI project to take place, the city would have had to back a $14 million loan to the project by issuing general obligation bonds. 

    Barry asked about de-listing the property in September of 2009, and HRI ended their involvement with the Threefoot project in December of that year, citing a lack of cooperation from the mayor. The city then paid HRI $1 million to reimburse pre-development costs, a requirement laid out in the development agreement.

    Josh Collen, a vice president of development for HRI who was closely involved with the Threefoot project, said HRI was not aware that Barry looked into having the property removed from the National Register of Historic Places. He said the financing of the project centered on tax credits available only to buildings that are listed on the national register.



What which historic status means



    Even if a formal request to de-list the building were made, the likelihood of its being granted is low. According to Bill Gatlin, the National Register coordinator for the state, "We only delist buildings if they are destroyed or so altered that you can't tell what they look like."

    "It would have to be much, much more damaged than the little deterioration that has occurred (to be de-listed)," added Woodrick.

    Removing the property from the National Register wouldn't have made it any more or less legal to demolish. "National Register listing doesn't in and of itself provide any protection to any building. That's only if there's federal funding," said Woodrick

    According to the National Register Web site, "National Register listing places no obligations on private property owners. There are no restrictions on the use, transfer, or disposition of private property."

    While National Register listing does not offer protection to historic buildings, it does make a building's renovators eligible for federal tax credits. If those tax credits are used, restrictions on what can be done with the building apply, but if those credits aren't being used, as is currently the case with the Threefoot building, the building's owner is free to demolish the building, or otherwise alter it in any way they please.

    John Hildreth, director of the Southern office of the National Trust for Historic Preservation, said the building's designation as one of America's 11 Most Endangered Historic Places for 2010 also does not place any restrictions on what can be done with it. Like the National Register listing, the Threefoot's designation as an endangered historic place is meant to provide it with funding opportunities.

    But there are restrictions on alterations to the Threefoot building, and those are there because the building has been designated by MDAH as a Mississippi Landmark.

    Russell Archer, of the MDAH Landmark Program, said that Mississippi Landmark status gives MDAH license to oversee alterations to a building.

    The goal, he said, is to "preserve as much historic fabric of the building as possible."

    However, that doesn't mean they won't give leeway when the circumstances call for it.

    "Our interest isn't in making a building into a museum piece," he said. "It varies according to the project. In broad terms we follow the Secretary of Interior standards for rehabilitation... We use these standards as a guideline."

    Archer said the Landmark program aims to preserve the historic significance of Mississippi Landmark buildings while still allowing for the modern upgrades that they need to be viable and useful.

    As an example, he pointed to the recent renovation by HRI of Jackson's King Edward Hotel. The building was made into a Hilton Garden Inn hotel with all the modern amenities that the Hilton franchise requires, and with apartments on the upper floors that were not historically part of the building.

    Decisions on these kinds of allowances, Archer said, are made project by project.

    In addition to being on the National Register of Historic Places, on the NTHP endangered list, and a Mississippi Landmark, the building is also on the Mississippi Heritage Trust 2009 list of the Mississippi's 10 Most Endangered Historic Places, which is similar to the NTHP list, but on a state level. It was MHT that nominated the building for a place on the national list.

    It was also by nomination that the building was placed on the National Register. It was listed back in 1979, with its architecture as the primary reason it is considered historically significant, Preziosi said.

    "It's one of only three Art Deco skyscrapers in Mississippi, and the only one outside of Jackson," he said.

    The Threefoot was designated a Mississippi Landmark in July of 2008. It was not nominated, but was identified as a landmark by MDAH. Archer said there was local support for the designation at the time.

    Along with MDAH, the Meridian Historic Preservation Commission has the right to approve or deny modifications to Mississippi Landmark buildings in Meridian.

    So, while the National Register listing and NTHP endangered status don't restrict what can be done to an historic building, these two agencies do. As a Mississippi Landmark, the Threefoot building cannot be either torn down or renovated without their consent.



Looking back at Meridian and its tallest building



    The city of Meridian has had a long and rocky relationship with the Threefoot building. In the past four years, that relationship has sparked one controversy after another — from the purchase of the building in 2006 to its designation as an endangered historic place this year.

     First constructed in the late 1920's by two brothers who ran a successful hardware business in downtown Meridian, the Threefoot building was meant to hold hundreds of offices. But the timing of its construction was bad — coinciding with the stock market crash of 1929.

    The Threefoot family lost the building during the great depression — but it continued under different ownership as an office building for several decades. After Meridian's first mall was built in the 1970's, the city's economic center began to shift away from downtown, and the building saw fewer and fewer tenants.

    By the 1990s the Threefoot was mostly abandoned and was in ample company as one of downtown's many deteriorated buildings.

    In August of 2006, the city purchased the building from Alabama developer Howard Robbins for $1.2 million. According to a Meridian Star article from that time,    the city purchased the building with the expectation that it would be renovated by an unidentified Jackson developer into "200 hotel rooms, retail shops, and banquet halls."

    Though no developer from Jackson followed through with the building, HRI spent an extensive amount of time working with then-mayor John Robert Smith to create an agreement between themselves and the city to develop the building.

    HRI planned to transform the building into a Courtyard by Marriott hotel with a $55 million renovation, $14 million of which was to be backed by the city. After many negotiations, public hearings, and a last minute challenge by local hotelier Abdul Lala, HRI and Smith prevailed on the city council to approve the development agreement, which they did with a 3-2 vote in January of 2009.

    In July of 2009, Barry took the office of mayor and soon reported that she saw problems with HRI's plan. In September, she asked Preziosi how to go about removing the building from the National Register. Around that same time, HRI asked the city to help them complete the funding of the project by assisting them in procuring grants from the state.

    Barry refused to ask the state for grants, saying that economic times were too grim to ask for money that wasn't essential for city government to function. She also reported problems with the acquisition of an adjacent building that needed to be torn down to make way for the project.

    In December of 2009, the city's agreement with HRI was dissolved, and the city agreed to reimburse $1 million to HRI for their costs in pursuing the project.

    Things were then relatively quiet when it came to the Threefoot building until June of this year, when NTHP announced that the building was included on its 2010 list of America's Most Endangered Historic Places.

    The listing was announced at Dumont Plaza, but Barry and her staff were not present for the announcement. Barry later said she did not attend because she was not informed of the event in a timely manner, and wrote a letter to the Meridian Star criticizing NTHP and MHT for neglecting to send her an advance invitation, and for placing the building on the list without first consulting her.

    She said the announcement was made in poor timing because of the financial problems the city is facing.

    Preziosi said not including the mayor on the invitation list was not meant as a slight, and that only local members of NTHP or MHT were invited. He also said the mayor did not meet with NTHP representatives to discuss tax credits and other options, saying, "I don't think it worked out scheduling-wise."



Endangered historic place



    Representatives of NTHP and MDAH said the listing does not mean the city will be forced to spend money on the building, and that the endangered status is not meant to imply any wrong-doing on the part of the city, but to bring national attention to the building, along with increased grant and development opportunities.

    "The (endangered) status I think a lot of times is misread by communities," said Mingo Tingle, the chief of technical preservation services for MDAH. "The word endangered has a two-edged sword effect. Some might think it implies that the owners had not done their job taking care of the building. But with the city that has not been the case."

    By being on the endangered list, Tingle added, "It gets national recognition, for, first of all, its importance, and second of all, the need for funding and rehabilitation. So I think the fact that that was done is going to be pluses for Meridian... The fact that it says endangered means we've got to move fast... And, though they say we are in dire economic times, there are a lot of tax credit and grant opportunities that are available for that building."

    Barry said she would "love to talk to the Mississippi Heritage Trust as far as getting grant opportunities to stabilize (the Threefoot building)."

    She said that, for the time being, she feels stabilizing the building — keeping it from crumbling to the ground — is all the city can do, especially considering the flooding problems in and around the building's basement.

    "It's not just a matter of saving the building, it's a matter of looking at the entire block," she said.

    When it comes to the insurance, utilities, and other regular costs of the Threefoot building, Barry said she does not currently plan to use demolition as a means to put those costs to an end.

    "We don't have a choice in the matter (of paying bills on the Threefoot building) right now," she said. "We're looking at all our options, and talking and working with developers."

    

    For more on what the options, opportunities, and possibilities for the Threefoot building are, read the second installment of this story in Monday's Meridian Star.   

The costs of the Threefoot building



    The City of Meridian purchased the Threefoot building in August of 2006. Since then, it has done what buildings usually do — rack up bills. Ed Skipper, the city's finance director, gave the Meridian Star a breakdown of what the city has spent on the building in the last four years:



Amount borrowed for purchase: $1.225 million



HRI Payment: $1 million



Stabilization costs: $105,471



Insurance premiums 2006-2009 - $156,575



Other incidentals, such as replacing broken windows, 2006-2009 - $5,865.30



Monthly expenses, such as utilities, 2006-2009 - $25,151.58



All fiscal year 2010 expenses to date: $54,559.91



Total expenses 2006 - present: $2,572,622.79