Special Person Street Partnership (PSP) Report: William Peace University (WPU) and Seaboard Station

Post date: May 21, 2013 11:20:17 AM

The following report is an in depth summary of the PSP’s involvement and analysis of the WPU/Seaboard Station issue. There is a summary at the end of this document that condenses the information contained within this report and provides a final synopsis and recommendation.    

WPU - - A Valued PSP Stakeholder

Since the inception of the PSP over two years ago, we have worked with current business and property owners, stakeholders, and future businesses in the Person Street business district. I have worked with John Cranham, WPU VP of Grounds and Maintenance on several initiatives that would enhance the business and neighborhood environment around WPU which includes both the Person Street business district and shops at Seaboard Station. John and I attended a due diligence meeting with Raleigh City Planning officials to discuss a potential parking area off Blount Street owned by WPU that would be shared by the University and businesses on Person Street. We also discussed the idea of establishing a pedestrian walk-way which would reconnect the Person Street business district and the shops of Seaboard Station. This new walkway would follow the old Franklin Street right of way but connect more directly to the section of Franklin Street leading into the heart of Seaboard Station. A third idea discussed was a special outdoor event hosted by WPU on their back lawn for their faculty, staff and students and the surrounding neighborhoods. Thoughts on the event included having food trucks and a variety of other activities with the idea that a special annual event could begin.

Our Meeting with WPU and Neighborhood Leaders

After the news broke that the owner of Seaboard Station was in Chapter 11 bankruptcy and that WPU was keenly interested in purchasing the Seaboard properties, we have attempted to gain as much information as possible about this complex situation. I attended the public hearing at City Council where WPU’s request for tax exempt bonds required a vote of approval from Council. While the bonds were not directly related to the purchase of Seaboard, the timing of the two activities was unsettling to many and we issued a statement from the PSP to ask that WPU explain to neighborhood leaders their plans for campus expansion and intentions regarding Seaboard Station. When Council delayed the public hearing by one month to give WPU and neighborhood leaders time to meet, I worked with WPU’s public relations firm to set up a meeting where President Debra Townsley could openly dialogue with leaders from the Mordecai CAC, The Society for the Preservation of Historic Oakwood, and the PSP.

I attended this meeting with Sarah Roholt, a PSP organizer and Piebird owner George Duncan as representatives from the PSP. In a brief power point presentation, Dr. Townsley clearly stated WPU’s goals to rebrand their university and what it would require for them to survive in the competitive world of four year co-ed schools. In regard to their purchase of Seaboard Station, she emphasized that WPU has embraced the current model of “campus beyond gates” where colleges and universities purchase retail and restaurant centers adjacent to their campuses. Dr. Townsley emphasized that WPU wanted to purchase Seaboard to “preserve” the shopping center, protect it from being acquired by other less well intended developers, and to provide an income stream for the University.

As our round table discussion began, a primary theme that emerged was that of poor communication and public relations by WPU currently and in the past. Sarah, George, and I agree that WPU has been woefully lacking in their efforts to reach out to concerned neighbors. We all urged President Townsley to issue a statement from WPU that would indicate their sincere desire to work with the surrounding community and the tenants of Seaboard. A simple statement like “We truly value our neighborhood partners and we want to grow the University responsibly with your help and guidance” - - would go a long way in healing long held feelings of

While we felt that the meeting was cordial overall, we did express our deep dissatisfaction with their intent to purchase Seaboard despite their reasons. Our observations regarding WPU's lack of transparency in the past were noted by President Townsley.

After the meeting, Sarah, George, and I all agreed that WPU is not the best entity to purchase Seaboard Station because of the conflict of interests that would arise in growing both a university and a well-loved shopping center at the same time. Even if they were able to discuss the purchase with Seaboard tenants, they would quickly find out how this could hurt rather than help the University and for this reason we feel that their trustees should be made aware of our deep concern.

In the time period since our meeting with Dr. Townsley, no one in our meeting has heard from WPU other than several non-related press releases.

Our Meeting with Seaboard Station Tenants

We encouraged and attended a meeting with several long time Seaboard tenants and our neighborhood leaders one afternoon recently to hear the concerns to which WPU cannot listen because of a non-disclosure agreement. These tenants have invested huge portions of their personal savings into their businesses because they felt Seaboard Station was a long term investment. While they realize that things change, a majority of the tenants do not want WPU as their new owner because they do not believe that a land challenged university is the best owner of a vibrant downtown shopping center. Their hope is that the current owner of Seaboard Station will be able to reorganize under Chapter 11.

More importantly, the tenants believe that if WPU purchases Seaboard, the center could take a downward spiral which will cost both them and the University dearly. With no guarantee of a long term future, these business owners are already postponing any new equipment purchases or expansion plans and many are considering other options to relocate their businesses if necessary. With WPU relying on the income stream from their new investment, they too will suffer financially should the center decline.

Brief Perspectives from Another Potential Buyer and the Real Estate Agent for Seaboard

If the current owners are unable to reorganize and subsequently go into Chapter 7, the tenants feel that their best bet would be a new owner with shopping center expertise and long term interest.

I spoke with another potential buyer who owns other shopping centers and who has looked at the Seaboard property. In a short statement, he simply acknowledged the complexity of the current owner’s bankruptcy and indicated that the center is a unique property with unique challenges. But despite the challenges, they were still interested in the property.

Sarah reached out to the real estate company representing the owners and received this email response:

“Yes, Gregory & Parker is in chapter 11 bankruptcy, which is typically a reorganization type of bankruptcy, rather than a quick liquidation. The family who owns the assets wants to be extremely careful with all decisions as to whether or not to sell, who to sell to, etc. Therefore, we are working very hard to make sure that we conduct any and all leasing or sales of properties in accordance with our attorneys' and the family's wishes.”

PSP’s Current Recommendation

The PSP currently has no formal structure or bylaws. We’ve existed until now primarily as an advocacy group that holds quarterly meetings with knowledgeable speakers who speak on topics relevant to our goals to build momentum on Person Street. So when making a recommendation about any topic related to Person Street or the surrounding business climate, we try to gather facts and relate details about particular issues based on the best information that can be obtained.

After working with John Cranham at WPU, attending the public hearing at City Council, attending a meeting with WPU officials and then a meeting with the tenants at Seaboard, and finally reaching out to another potential buyer of Seaboard and the real estate agent for Seaboard - - I would like to make the following recommendations based on the PSP’s key operative word - - momentum.

For the North End of downtown to grow and succeed in meeting the goals of all its stakeholders, we need to work together in building shared momentum. When one stakeholder seeks to build momentum without proper “buy in” from the other stakeholders, then all lose momentum as a whole.

Therefore, we recommend that WPU exhibit extreme caution in its pursuit to purchase Seaboard Station and work instead with the owner and tenants of Seaboard along with the surrounding neighborhoods to see that every chance of Seaboard Station's survival as a family owned independent downtown shopping center is examined and supported if possible.

If Seaboard Station is unable to reorganize, then we ask that WPU support our subsequent goal of finding an appropriate buyer who will “preserve” Seaboard Station as a fully functioning downtown shopping center with room to grow. We ask that WPU carefully consider whether their “campus beyond gates” strategy approach will not compromise Seaboard Station rather than help it.

Once the current or new of owners of Seaboard Station are in control and the momentum of Seaboard Station is re-established, we recommend that WPU operate as an open and transparent university, one that we will be happy to support and help in their goals of building momentum with the rest of us in the North End of downtown Raleigh.

Summary Recommendation

The PSP values WPU as a stakeholder and our collaborative efforts on parking, re-establishing a pedestrian walkway between Person Street and Seabaord Station, and a neighborhood social event. We greatly appreciate our meeting with President Townsley and other neighborhood leaders and the chance to hear details of their future plans of WPU and their intention to purchase Seaboard Station. We strongly urge extreme caution in moving forward with a purchase of Seaboard because of the financial risks and conflict of interests involved for the University and the current tenants at Seaboard. We ask WPU to help us in our goal of finding the “best” owner for Seaboard. We also strongly urge WPU to issue a statement which helps to put past issues to rest and indicates a willingness work with their surrounding neighbors in a spirit of transparency and openness to build a better North End with positive momentum for everyone.