By David Rogers. January 22, 2020. BLOWING ROCK, NC – In our Blowing Rock ONE on ONE series of interviews, we usually try to strike up a timely conversation with someone in the community or who is somehow impacting the community in a significant way. This interview with Steve Barker of The Catellus Group is timely because in recent weeks we have heard speculation around town that the Rainey Lodge project — whose CUP application was approved last June — will not actually be built. So, this interview is an opportunity for us to learn and understand the status of that project and, at the same time, broach a number of other relevant subjects, including the proposed gateway to Blowing Rock, occupancy taxes, parking, and less than 28-day vacation rentals among other subjects. Our conversation was last week, in The Catellus Group’s Charlotte office.
Blowing Rock News (BRN): Good morning, Steve. The catalyst for this interview is the approval by the Blowing Rock Board of Commissioners back in June for your Rainey Lodge project downtown. Given the time that has transpired, people are wondering about the status. I have even heard one guy declare that “This hotel will never be built.”
Steve Barker (SB), laughing: I grew up in a small town and when new things are scheduled to happen people are always curious about the progress. Sometimes that grows into rumors and innuendo, which is unfortunate, but something we have grown accustomed to. You know, anyone with questions or concerns can always give me a call. I welcome the opportunity to bring them up to date.
Whether it is obvious or not, things are pretty much going according to our plans.
BRN: Ok. What can you tell us about the project?
SB: The first response is “yes” it is going forward and whether it is obvious or not, things are pretty much going according to our plans. Just leading up to the approval by Town Council we spent a lot of time and money on this development. We have spent a good deal more time, money and energy since the approval on what in our world is called the “pre-development phase.” A more accurate term might be “pre-construction phase.”
BRN: What is involved in that early phase when nothing is happening on the actual ground?
SB: That is a good way to describe it. Nothing is happening on the ground – YET. Getting approval from a municipality is just the launch point for the actual project and we started the day after the Blowing Rock board granted us that approval. As mentioned, that approval process took roughly eight months to plan and then make the presentation.
BRN: So eight months before your initial Town Council presentation this past April is when you came up with the idea for a hotel?
SB: Not exactly. In fact, the idea for a hotel emerged approximately five years ago, but it was not a linear process. Another idea intervened about filling the need for close-in downtown housing that featured both a walkable location and experience for residents.
Rob Pressley, a good friend, and well-known developer who also has long-term ties to Blowing Rock initiated the first presentation for townhouses on the parcel. It was a good project with a good plan, but it was unfortunately rejected by Town Council, mostly because of the density issue. I had a little more flexibility, so I picked up where Rob left off and proposed to develop fewer townhome units. That proposal was also rejected by the Board of Commissioners. Both of our proposals needed variances of one sort or another, but neither of us got an approval. Both presentations could have significantly addressed Blowing Rock’s need for housing downtown with limited to no off-site parking concerns.
Nothing is happening on the ground — YET.
SB: I suppose the real lesson is that any development — with the possible exception of a very few — pretty much needs to strictly adhere to Blowing Rock’s Land Use Code, without requesting variances of any kind. A related lesson was that we had to become even more familiar with Blowing Rock’s existing Land Use Code.
BRN: With those rejections, what were your choices?
SB: Well, obviously one choice was to leave it vacant, but then that becomes a wasted asset, doesn’t it? We chose to go back to the drawing board to figure out what else we could do with the property. We noodled with our architect and others and, in the end, determined how a small hotel would fit on the property.
BRN: So, you went back to your original idea.
SB: Yes, but with some valuable knowledge gained from the two previous townhouse proposal rejections. Once we determined that a small hotel was viable, we then set about following the EXACT guidelines contained in the Land Use Code ordinances. The goal was to eliminate any need for requesting waivers or variances.
BRN: We got a little sidetracked from my original question, but that was all useful and interesting information about the process toward gaining approval.
Back to the original question, after approval of the CUP application is obtained, what kind of planning process do you engage in before actually breaking ground? And the second part of that question is how do you finance the project?
SB: Both good questions. Everything in real estate is sequential, like getting over hurdles in a foot race. You get over the first one and then go to the second. Over the second, and on to the third, and so on until you reach the finish line.
Obtaining the necessary governmental approvals is always the first hurdle. Once achieved, the pre-development process begins.
Some of this might be best termed, “Chaos Management.”
BRN: What is involved there, in what you are calling pre-development?
SB: That process includes any number of contributing vendors, including but not limited to architects, engineers, environmental specialists, contractors, hotel management, interior designers, technology specialists and, of course, continuing approvals from the building department.
SB: It is, or it can be. The process takes the coordination of everyone’s contribution to the project, including their time. Each vendor has a schedule, too.
BRN: This is all stuff done AFTER the approval of the CUP and not before?
SB: Yes. There is no reason to do it before you gain approval. If you don’t get the approval, then you have wasted a lot of money and time. The approval is the real kickoff, so to speak.
BRN: Sounds complex and it is easy to see where “chaos management” skills could be valuable! If you could put a percentage number to it, what percentage of a project’s work is in what you are calling the pre-development phase?
SB: In our world, roughly 65% of the work is in pre-development and 35% is in the actual construction. Proper planning and coordination go a long way toward making sure that the actual construction phase goes smoothly.
BRN: Where does the financing come in? Where in the continuum is that hurdle?
SB: Usually at the end of the pre-development period. At that point, the kickoff for the on-site construction phase is the day after the loan closing.
BRN: What kind of role does weather play? You don’t necessarily know that you are going to have these balmy days as we have had over the holidays. Do you have to plan and prepare for historical winter conditions?
SB: Correct. There is no way to adequately predict the weather. You take a chance if you don’t build and you take a chance if you do build. That said, we have built projects in the wintertime, often in harsh conditions. We are currently building a hotel in Michigan where the weather is a factor.
I do not consider our involvement in the CUP process contentious. We were organized, precise, and respectful of the process…
BRN: How far along are you in the pre-development phase for Rainey Lodge?
SB: Pretty far. In the case of a hotel, the other thing you have to bring into the equation is a consideration for your hotel management company. They have some oversight responsibilities with the architectural drawings to make sure they logistically conform to how they run a hotel operation.
SB: OK, sure. If you have a bar and your plans suggest that a server will have to walk 75 feet to deliver a beverage to a customer, that may be a problem in the eyes of the management company. You have to use logic to determine the flow of people internally in terms of how they manage and serve the patrons.
BRN: Have you already identified your management company for this hotel?
BRN: Can you share the name or is it still too early.
SB: It is Hostmark Hospitality, out of Chicago. They are one of the nation’s best. They are handling another property for us, so we have some history with them and how they work. They have been particularly instrumental in our plans for the food and beverage area of the Rainey Lodge plans. We are very pleased to have them on board.
We weren’t necessarily focused on the High Country but we are focused on Blowing Rock.
BRN: In Blowing Rock the last couple of years, we have had the Chestnut Hill condominium development, the 1150 Main St. tear down and build, the Winkler Organization’s Cornish Inn and then their latest project, the Blue Ridge Motel. It seems like there were significant time lapses between the approvals for those projects and when the actual site work gets started. The Blowing Rock community seems to be more impatient about this project, perhaps because it was such a contentious CUP approval process.
SB: I think our process is pretty close to the other projects you mentioned. Perhaps our hotel’s location promotes more anticipation than normal. I certainly would like to be clear; I do not consider our involvement in the CUP process contentious. We were organized, precise, and respectful of the process and the procedures described by the Land Use Ordinance and of those participating. Unfortunately, detractors and the procedural process itself created a difficult atmosphere as described in the transcript and in the eloquent follow up editorials you wrote.
BRN. Perhaps. Switching to a different aspect of this project, how will the Rainey Lodge construction be financed?
SB: The financing will probably end up being more local through a bank. We have had a lot of local interest. We have also had genuine interest from an array of potential equity investors. So much so that we may not have to finance the project and just use all investors.
BRN: What do you estimate the ultimate cost of the project will be?
SB: I can’t give you a firm figure until our bids start materializing. However, it will be several million dollars.
The center of Blowing Rock will be slightly transformed, extended north…
BRN: Let’s switch channels a bit. Why bring Rainey Lodge to Blowing Rock and the High Country?
SB: Well, we weren’t necessarily focused on the High Country, but we were focused on Blowing Rock. We have visited a number of towns in the mountainous areas of North Carolina. One town that really impressed me was Highlands. There, the Old Edwards Inn serves as a sort of anchor for the local Highlands economy. There is a spinoff effect by virtue of the many guests they have at their hotel which affects their downtown commerce corridor. In Highlands, you see a diverse retail enclave. Part of that influence comes from the Old Edward Inn. The Owner of the Old Edward Inn invested substantially on the property and I commend them. It is a beautiful, timely and iconic hotel.
I am not saying that Rainey Lodge will have the same impact on Blowing Rock as the Old Edward Inn does in Highlands, but when you create something with that sort of feel to it, especially when you add in some of the other hotels and motels and new hospitality projects anticipated for town, you will attract people.
SB: Sure. The energy of a 40-room hotel with a small bar and restaurant in a very unique setting will modestly change the dynamics of Blowing Rock’s downtown. The center of Blowing Rock will be slightly transformed and extended north along Main Street. By virtue of including the hotel with other businesses in the area, such as the Speckled Trout, Mellow Mushroom, Footsloggers, Camp Coffee, the Ridgeway Inn, Cabin Fever, and more, you create a northerly bookend on Main in terms of increased economic activity. The continuing push has naturally started to extend beyond the light at Main and 221 and, over time, will extend to Chetola. This, in my opinion, is the growth area of Blowing Rock.
BRN: A few weeks ago, we sat in on the Blowing Rock TDA’s annual meeting. One of the themes in that particular meeting was the congestion of both pedestrian and vehicular traffic because of the success the TDA has had in promoting tourism. The TDA board asked questions, like, “How do we better manage congestion? How do we better manage the success we have experienced?”
Do you see Rainey Lodge as potentially increasing or decreasing that congestion?
SB: Because we have on-site parking, it certainly shouldn’t be seen as increasing vehicular congestion. Our guests can walk around downtown without getting into their cars. There will be sidewalks on all of the streets around our property as well. We will not contribute to further parking problems but will increase the viability of economic benefits to the community. Our hotel is a “parking neutral” development.
The automobile is a nemesis in development.
BRN: Parking is and has been a major topic of conversation in Blowing Rock for several years now. The two parking decks helped some, but on several weekends and holidays, especially during the summer and autumn months, a few folks have referred to Main Street and some of the feeder streets as one big parking lot. Have you studied, I guess you would say, the parking problem in Blowing Rock?
SB: No, not specifically. The automobile is a nemesis in development and that is whether you are looking at it from a developer’s standpoint or from a municipal governance perspective. It is a problem because most people arrive in town by car and you have to find a place to put that car while visiting in town, shopping in town, working in town, playing in town, or simply living in town.
The parking situation in Blowing Rock is quite unusual in that when a particular proposed development does not have enough on-site parking to satisfy the Land Use Code requirements, the developer is allowed to “buy” the parking spaces he or she needs by paying something like $7,500 per parking space needed. On the one hand, those monies go into the general fund, but they are earmarked in a special account to address future parking investments. How far does that $7,500 really go when a parking deck might cost $2-$3 million? So, you have to ask the question: is the Town exacerbating the parking problem by allowing developers to pay these special assessments when the proceeds, at least on the surface, seem insufficient to really offset the needs?
It is commendable that the TDA and the Town Council, as well as others, are focusing on the parking situation because parking has a direct correlation to commercial growth in a community. The problem does not go away and, as we have seen, without adequate planning the problem gets worse over time.
BRN: So how do we fix it?
SB: In my opinion, the first consideration may be to hire a traffic and parking consultant. Have them come to Blowing Rock, study the problems, evaluate town assets as well as trouble spots, and make suggestions as to how to tackle the problem. It is unlikely to be a quick fix. Certainly, a cost-benefit analysis should be included. More than likely, dedicated areas will have to be targeted for strategic parking.
A lot of the problem is the lack of past planning for new growth in tourism and other forms of economic development. Again, if you use the Old Edwards Inn in Highland as an example, there is available town parking in several locations. Sure, on certain weekends in downtown Highlands the parking may be maxed out, but a municipality focused on special events and tourism has to be able to plan for those occasions. In planning, you have to be able to secure or acquire property, or the ability to build vertically on existing facilities. You have to plan. You have to look down the road and say, “This is a potentially major problem for us.” I am sure Blowing Rock’s officials know more about the issue than I do, and probably have further insights.
BRN: We hear a lot of conversation about putting parking meters on Main Street like Boone has done. A major complaint is that real estate agents and retail store employees, even managers are parking on Main Street all day. That forces potential customers for various businesses of all sorts to fend for themselves, elsewhere, perhaps even several blocks away from their intended destination. In your experience as a developer who has thought a lot about these things, do parking meters solve the problem?
SB: Every municipality is different. That would be a question better directed for the consultant I mentioned earlier. They would be professionals who come in and do a comprehensive study. Is metering good? Is metering bad? There are probably both good and bad aspects. From town to town, parking situations are diverse. One parking solution does not necessarily fit all. It requires a focused analysis of issues and circumstances facing that specific community.
Every municipality is different.
BRN: Let’s switch channels again, although some of the issues have an impact on parking. Short-term rentals are a hot topic in town, especially with the emergence of Airbnb and VRBO, and the like.
In terms of parking, Blowing Rock’s increasing pressure in discouraging short-term vacation rentals within the town limits, except for in the central business district, may actually be the source of unintended consequences. While short-term rentals outside of central business have all but disappeared, there has been a sharp increase in new home construction or new availability of vacation rentals outside of the town boundaries. One property manager with whom I recently talked about these market trends points out that just because the Town of Blowing Rock outlawed short-term rentals, it does not mean that short-term vacationers have stopped coming. The demand for less than 28 days’ rentals is still robust. But those customers are staying outside of the town limits, out in the county jurisdictions, then driving to Blowing Rock for the restaurants, bars, retail shops and such.
One could say that the Town is shooting itself in the proverbial foot. The occupancy taxes that it might have collected from a short-term rental are instead going to the county TDA. And yet, the demands on infrastructure – parking, streets, sidewalks, and sewer – are actually increasing. Plus, their having to drive into downtown increases the traffic and congestion problems.
SB: Certainly, that is a good example of what may be unintended consequences resulting from decisions encouraged by the detractors of short-term rentals. Again, more thought may be needed in this area.
BRN: How has Airbnb and VRBO impacted your more traditional lodging businesses?
SB: The advent of the Airbnb world has affected the hospitality industry, generally, but I think that those online-centric services and the traditional hospitality industry will merge into the same thing later on. You are seeing some vestiges of that already with travelers able to book hotel rooms and Airbnb rooms under a known franchise online.
BRN: What do you mean by that?
SB: OK. Take a hospitality company like Marriott. They might branch out into an area, geographically, where they own or manage exclusive homes. Then they can either rent those houses or promote franchises that do so, so those houses can be used as lodging accommodations for two or three families, or groups of friends. The whole case for vacation home rentals is because where two or three families, or even one large family, want to visit a destination together. It seems almost silly to rent a block of 10 hotel rooms for maybe over $1,000 a night when they can rent one big house for, say, $300 per night.
Fifteen or 20 years ago, hotel companies like Marriott, Hilton, and Hyatt only had a certain, very much smaller number of brands. Now Marriott, for example, has roughly 20 brands and the others have similarly expanded to gain operating efficiencies and to reach new markets. Large franchises are always looking a new way to generate income, and the Airbnb model has done quite well. I would not be surprised that large franchises may create their own Airbnb product line. Again, expanding its footprint. It doesn’t take much of an imagination to envision one or more large brands focused on vacation rentals.
The Airbnb phenomenon does not scare me.
BRN: How does all of that drill down to the municipality?
SB: The smart thing for a city or town to do, and I am not sure if Blowing Rock is doing this, is to have the property owners using their homes for STRs to pay the occupancy tax, just like other lodging services. It is only fair. If a guest pays a 6% occupancy tax to stay in our hotel, at the Green Park Inn, or at the Ridgeway, then the guest staying in a short-term rental should pay the same occupancy tax, whether renting through Airbnb, through a property management company or where the owner is renting it themselves. That just levels the playing field for all lodging competitors.
SB: As a hotel owner and operator, the Airbnb phenomenon does not scare me. There are people who try that alternative lodging solution and don’t like it, so they come back to our full-service hospitality model. It will probably be several years before it all meshes out.
If you look at the hotel occupancies in Blowing Rock, they have increased significantly, year by year. If the occupancy goes up, that means the occupancy taxes collected go up, too. With or without the effect of the Airbnb’s of the world, occupancy taxes are rising in Blowing Rock. And if you want to relate this back to one of your earlier questions, a significant portion of that occupancy tax revenue should be used to address the fine balance between infrastructure stress and promoting the market.
You also should ask of the occupancy taxes as a whole, is there a good sharing balance between continuing to promote tourism and taking care of the repairs and improvements to infrastructure. I think the sharing split established in 2006 when the Blowing Rock TDA was created was for two-thirds to go to the TDA for promoting tourism and one-third kept by the town to offset infrastructure problems. That may have been appropriate back then but may need to be revisited. How much of the occupancy taxes collected are being used to address the parking problems, for example? It is a problem when the great efforts of the TDA promote more tourism, but the tourists have no place to park.
BRN: Well, let’s talk about some of the macroeconomic and demographic trends that you see impacting Blowing Rock right now.
SB: There are a couple of things. One is that there is relatively little land in Blowing Rock to develop. If you look at Blowing Rock from, say, Valley Blvd. to somewhere west of Main Street and look at all of the business activity vs. available land…well, there is not really much of a development opportunity unless you tear something down. A community with a limited amount of land to develop circles back to some of the same central issues, like parking. How much in the way of development can you really build and where do you build? How much can the town really grow? Horizontally, Blowing Rock has some natural barriers to growth when you consider the Blue Ridge Parkway and national forest boundaries, as well as the undevelopable gorges on the west, south, and east. How much do you want to allow Blowing Rock to grow vertically and still preserve the history and village charm that people here want to protect?
From a macroeconomic perspective, our hotel development, Rainey Lodge, is appropriate because it COULD be developed on that site and it CAN contribute to the economic impetus that the town needs, without impacting parking.
Yes, the rock.
BRN: Speaking of available land…there is still that 7.35 acres at the front of Chetola where a few years ago your group gained approval from the then sitting Board of Commissioners for the Mountainleaf project. That never happened and the parcel is now under new ownership, but we have to wonder about the possibility of any future development there.
SB: Quite candidly, we spent a lot of money to make the Mountainleaf project come to fruition. I commend the then sitting Town Council for granting us the approval to go forward. They worked as hard as we did to try and make that project work. The unfortunate thing is that our original estimates for site preparations were substantially lower than what the actual site work costs were going to be. As a consequence, the pro forma business model just didn’t work. The numbers didn’t make sense.
BRN: Is that because of the rock on the property?
SB: Yes, the rock. We learned a lot from that experience, and it was an expensive lesson. But that particular property and what it might be used for…that is a good example of a solution-type question that needs to be asked and answered. What CAN it be used for and how can any development blend into the fabric of the community? Should it be a smaller-scale project? Can you make the numbers work on a smaller project? Should there be housing of some kind there?
That is a decision that the owners of that property now or in the future will have to make. It is still a vital and valuable parcel. Our Mountainleaf project was pretty big and would have impacted the town, ultimately, in a very positive way but it didn’t happen. I leave that for others to figure out now.
BRN: Speaking of trends…The widening of U.S. 321 all the way up from Lenoir and to Boone is now providing better access from down the mountain to the High Country. With that improved access, do you see Blowing Rock becoming almost a bedroom community tied to Hickory and Charlotte?
SB: No, not necessarily. It is still an h0our and 40 minutes away from Charlotte, so a lot of that seasonal aspect is going to remain. I see Blowing Rock more as a sub-market of Boone because of the proximity, even though we largely keep our own municipal, social, and cultural identities. As a community, though, Blowing Rock relates better to the Boone “atmosphere” than it does to Charlotte’s much more urban atmosphere.
In a macro sense, Blowing Rock is part of a larger puzzle.
BRN: What opportunities are being created, regionally, with that better access, though?
SB: We did a hospitality study on U.S. 321 from I-40 in Hickory all the way up to Boone, looking at all of those various towns, including Hudson, Granite Falls, Lenoir, Blowing Rock, as well as the endpoints of Hickory and Boone. U.S. 321 is an interesting thoroughfare because it is the main north-south artery in all of those towns. It dies off in Boone and then goes east and west on U.S. 421.
U.S. 321, in and of itself, is something that should be studied more carefully to see how connections can be made to and through these different communities. If each community stands alone, it is harder to promote economic growth. If they work together, I think there is a good possibility that each could benefit more.
My observation has been that if someone looked at Hickory, they think, “Oh, Blowing Rock and Lenoir are out there someplace.” If they live in Lenoir, they think, “Oh, Hickory and Blowing Rock are out there someplace.”
Most people look at each community as an isolated, independent municipality. But what if someone were to form a commission whose mission was to, say, study the traffic, industrial growth, commercial growth, and residential growth along the 321 corridors? Then you have defined the corridor as a place. Right now, it is just a road.
So, in the macro sense, Blowing Rock is an independent part of a larger puzzle, as is Lenoir and Hickory. If there was a 10-year plan for U.S. 321 corridor development all the way from I-40 to Boone, I think it would bode well for all of the communities in that corridor.
The widening of 321 through Blowing Rock is both good and bad. The good thing is that it is a lot easier to get up here than before. The bad thing is that people coming up the mountain can just speed right along and go past Blowing Rock.
BRN: Yes, for the businesses in town that would be a bad thing.
SB: So how do you attract the traveler that is coming down from, say, Johnson City through Boone and down the mountain to Hickory or Charlotte? How do you stop the visitor from Columbia, South Carolina going to Boone? How do you get them to stop in Blowing Rock when they are driving 35, 45, or even 55 miles per hour along Valley Blvd.?
BRN: There is quite a bit of current discussion, including proposals advanced by the Village Foundation and the Blowing Rock Chamber of Commerce about a “gateway” concept at the Valley Blvd. and Sunset Drive intersection. It was considered once before by the Town, but eventually eliminated because of the costs and some thought the proposals much to elaborate or too “fancy,” as well as expensive. Would something like a gateway accomplish some of what you are suggesting?
SB: Yes, there was an original opportunity and it became a question of economics, mostly. But to accomplish what I am talking about; you may wish to consider an iconic gateway to downtown Blowing Rock. It doesn’t have to be a monument. It can be much more subtle and attractive. In my mind, the opportunity is at the Sunset Drive intersection with Valley Blvd. Why? Because it is the main street that goes directly into downtown and, in fact, dead-ends at the equally iconic Memorial Park. It ends in the very center of downtown. The only other possible intersection would be by Chetola and the Tanger Outlets, where Valley Blvd. intersects with Main St.
But you are not INSPIRED to go that way.
BRN: Why is this iconic structure important?
SB: Because if you are driving along 321 and you see this iconic sort of structure, whatever it might be, with signage that says, “Blowing Rock, North Carolina, Home of Mitford” – or whatever you might want the tagline to read, you create a memorable entrance. You attract interest.
When you go to Disneyland and you see the castle there, you know you are at Disneyland. What happens in Blowing Rock now is that newcomers don’t really know where it is. Limited directions, signage. No lager or iconic images, signage or other feature to announce Blowing Rock. The challenge is how to draw travelers off of Valley Blvd, to capture that market of otherwise passersby and bring them into Blowing Rock.
The recent widening of Sunset and the repairs to that thoroughfare were much needed. It is a great fix, as far as it goes. The problem is the unfortunate economic constraints to do something special at 321 to entice visitors.
To better understand, let’s use a parallel. In songwriting, they would call the gateway a “hook.” Every great country and western song that has ever been made has a hook. It is that phrase that reels in the listener. It is a catchy combination of melody, lyrics, and rhythm.
In development, the hook is something you create design-wise, architecturally, to promote the influence of your community on the larger region or even world. Right now in Blowing Rock, if traveling north on Valley Blvd., you MIGHT have to stop at the signal light. You MIGHT turn left at the gas station and you MIGHT find your way downtown.
But you are not INSPIRED to go that way, toward downtown because there is no hook. Unless you have a predetermined destination downtown, you arrive there almost by accident.
It is necessary.
BRN: So, if we hear you correctly, you favor the whole gateway concept.
SB: Yes. Absolutely. There are so many things that you can do visually and architecturally, and there are some really smart people that can put that together, make it really cool. You have to spend some money on it, but the money should come from the 6% occupancy tax perhaps or other areas where you can devote money towards an iconic structure. You want people to stop and say, “Gee, we should turn here and see what Blowing Rock is all about.” When they get to Memorial Park, Blowing Rock sells itself.
BRN: Considering downtown, what are your thoughts about undergrounding utilities on Main Street, or at least relocating them.
SB: It is necessary. The morass of overhead wires is the cumulative effect of adding utilities and electrified services over many years. It is a lot like a once clean closet that over time becomes cluttered. One day you suddenly wake up and realize that the clutter is a problem.
Tearing up half the town is problematic, but in the long-run evolution will require you to do that. In relocating the utility lines, there are a lot of land-related issues. Again, it is about planning. Instead of just flat out saying no, as part of a long-term plan how do you help the utility companies accomplish their objectives and at the same time fulfill the long-term preferences or objectives of the community.
Ideally, you put the utilities underground and I am sure that is a question that has been brought up on occasion. I think Blowing Rock News even ran an editorial about it several years ago. Aesthetically, if you look up and down Main Street, you seldom see the telephone poles or whatever, but if you remove them then suddenly you see the town. It is kind of interesting.
The collaboration between the utility enterprises…you want to make sure they are profitable in providing the services that everybody needs. In my world, we use a lot of outside vendors. There are so many talented and accomplished people you could use to make things happen. The question is how to disengage telephone poles to provide electric services through an underground facility. There are people out there who have studied this, I am sure, and can offer economic solutions that can be applied over a longer period of time.
BRN: The Town’s engineering firm, McGill Associates, completed a study a few years ago and concluded that it would cost more than $17 million to underground downtown utilities. That’s a big number. Some might question it if a developer can build a 40-room hotel with a restaurant, bar and 52 parking spaces, with landscaping, for several million. Why does it cost more than twice that amount to bury some utility lines?
SB: There are different ways to do it, I suppose. It becomes a question of planning and finance. $17 million doesn’t seem like a lot of money over 20, 30, 40 years. Five years from now, if not already, it will be $25 million. So, the questions become, “What will you do and when will you do it?” It is unlikely to get any cheaper?
BRN: This can has been kicked down the road for a long time.
SB: For a long time, sure. There is a point in time, though, where good leadership, good business principles, and good financial heads should be able to grapple with that issue and come up with a solution that can be viable for everyone.
Besides the cost of undergrounding, you also have to consider the impact on the downtown businesses served by those utilities. How much can they endure the suffering of having downtown streets and sidewalks torn up? That is just one of the considerations driving a solution to the problem. How can we NOT disrupt things as much as possible? Those are questions embedded in the larger question of what to do. It is a common problem with the municipalities where we have had experience. It is not just isolated to Blowing Rock.
BRN: One final area of discussion….What are some other developments that you and your team are working on?
SB: We have six different projects that we are working on now, in various stages. They are all hotels and mixed-use related developments.
BRN: All in North Carolina?
SB: No. Right now, for example, we are building a an 83-room hotel in Michigan, on a property that I have owned for several years. We are in various stages of pre-development or construction on five other hotels.
We have a lot of investors that are familiar with our company and what we have done in providing transparency and profitable real estate transactions. We have been very fortunate in that regard.
BRN: Thanks for your time today. You have been very generous and candid with your answers to our questions.
SB: Thank-you for your interest in better informing your readers what we are about.