Tourism authority takes over ownership of Gateway Building
SALISBURY — The Rowan County Tourism Development Authority has taken over ownership of the Gateway Building at 204 E. Innes St. from the Chamber of Commerce.
The change means the building is now tax-exempt, which will lower the rent for all occupants. Three major tenants — the chamber, tourism and RowanWorks Economic Development Commission — also plan interior renovations intended to help them work better together and make the building more welcoming to visitors.
Greg Edds, past chamber chairman, suggested the change in ownership as a way to save money. City and county property taxes on the Gateway Building are about $31,000 a year.
Edds said he also wanted to find ways to work more closely with tourism and the EDC, as well as Downtown Salisbury Inc., which may move to the Gateway as well.
Edds said the chamber was “horrified” when the Post ran an article last year about local groups — tourism authority, EDC and DSI — important in the realm of economic development and did not include the chamber.
“That was our fault,” Edds said. “We recognize that.”
He said he realized the chamber needed to change direction and has worked since then to forge new partnerships. The ongoing search for a new chamber president has emphasized the need for collaboration, Edds said.
Two finalists for the chamber’s top job return next week for a second round of interviews, and Edds said he expects to have a new president in place in 30 days.
The $2.6 million Gateway Building is paid off, thanks to fund drives and large contributions from the city of Salisbury and Rowan County more than a decade ago that raised nearly $3.8 million for construction of the facility and other programs.
Because there is no debt on the building, rent has been going to pay for utilities and upkeep of the property.
Since the building opened in 2001, all tenants, including the chamber, have paid rent to the chamber’s company, Focus Future LLC, which owned the property. The company still exists, but its assets have transferred to the tourism authority, the new landlord as of Feb. 22.
Assets include a $40,000 reserve fund for building emergencies.
If the tourism authority ever folds, ownership of the building reverts back to the chamber. Because tourism can’t take on debt, the organization can never use the building as collateral.
So far, the change has saved at least $45,000 a year — $31,000 in taxes and $15,000 in renegotiated service contracts for insurance, building maintenance and more, said James Meacham, tourism’s executive director.
Tourism and the chamber, which each occupy about 3,000 square feet, have each been paying $30,000 a year in rent. That will fall to $10,000 each.
The EDC, which uses 2,500 square feet, has been paying annual rent of about $23,000, which has been cut to $8,000. Three tenants in smaller spaces will pay about $5,000 a year in rent. The lower rent rates will take effect in the next fiscal year.
The building’s new tax-exempt status means no more for-profit tenants. A private counseling service that rents space in the building will leave in June at the end of its lease, Meacham said.
Communities in Schools will stay, he said. DSI and another, unnamed nonprofit economic development group are considering signing leases.
Interest in the building is up as word spreads about lower lease rates, Edds said.
“We’ve gone seven months with an empty space, and now we wish we had more space,” he said.
The change broadens the scope of the tourism authority even further. The authority, which is funded with hotel room taxes, recently took over marketing and promotion for Downtown Salisbury and the N.C. Transportation Museum Foundation, as well as the town of Gold Hill.
The Rowan Arts Council now falls under the tourism authority, as well as the trolleys.
In a county of shrinking budgets, tourism’s marketing budget is expected to grow from $195,000 to $225,000 with the opening of the new Courtyard Marriott.
Robert Van Geons, executive director for the EDC, said the Gateway Building will become a community hub for economic development, a goal of the facility that had not been achieved.
“It was a good start, and we are taking it further along that original vision of collaboration,” Van Geons said. “Our goal is to make every square foot and dollar in that building move toward embracing that original concept.”
One of the EDC’s second-story offices will become a central location for all organizations to share a copier and office supplies. The EDC will save $20,000 in operational overhead and eliminate one part-time position, Van Geons said.
Tenants plan to share one employee who will greet visitors, answer phones and serve all organizations in the building.
Large, unused space in the lobby will become more welcoming as the tourism authority and chamber open their first-floor offices into the shared space, removing unnecessary walls and add a staffed central desk and digital visitors center with touch-screen kiosks for tourists.
Renovations will total about $30,000 and will begin upstairs with the goal of more shared space, less redundancy and improved collaboration.
The original concept of the building was to encourage partnership between three economic development groups, said Pete Teague, who led the effort to construct the Gateway and now serves as the EDC board vice chairman.
“We knew that putting them into the same building, it wasn’t going to be automatic, but it would give a great opportunity for that to happen,” Teague said. “But over the past decade, it didn’t happen. To my great joy, I think it will now.”
While all the organizations are different, they have some overlap and duplication, Teague said.
“Cooperation and communication — that’s what was missing,” he said.
Randy Hemann, executive director for Downtown Salisbury, said he can see advantages to moving to the Gateway.
“We can see the value of having everybody in that building,” Hemann said. “With the changes that are going on and the cost coming down, we will see if we can work it into our budget.”
Hemann and one part-time employee work in the Plaza, owned by the city. DSI has been paying $7,500 a year in rent to the city, although Salisbury waived the rent this year. DSI manages the Plaza for the city.
DSI would pay less than $6,000 a year in rent at the Gateway, and the city could charge a higher lease to a for-profit business in the Plaza, Hemann said.
“If we left, the city would make more income,” he said.
While DSI already works closely with tourism and the EDC, Hemann said he would welcome the day-to-day interaction that comes with sharing a building.
Rowan County commissioners have shown interest in moving the EDC to one of the former Department of Social Services buildings as part of a proposed business incubator.
Van Geons said he is still researching that possibility, which should not impact changes underway at the Gateway.
“These changes are good whether the EDC is there for 18 more months or for the next 20 years,” he said.
Moving ownership from the chamber to tourism has met resounding approval, Edds said.
“We thought it would be controversial,” he said.
The chamber board unanimously approved the change, Edds said. He contacted several original investors, who also supported the idea, he said.
Salisbury and Rowan County officials, as well as business leaders, approved, Edds said.
The chamber, with more than 900 member businesses, wants to play an important, relevant role in economic development and be seen by the community as a key contributor to the local economy, Edds said.
The EDC, tourism and DSI form a three-legged stool of economic development, he said.
“A three-legged stool is good,” Edds said. “A four-legged chair is better.”
Contact reporter Emily Ford at 704-797-4264.