The Jonesborough Board of Mayor and Aldermen on Monday voted to proceed with negotiations to finalize an agreement that will allow the town to buy the International Storytelling Center building in its downtown historic district. The town will then lease the building back to the nonprofit ISC organization for a sum that will cover the town’s debt service on the building from the USDA Office of Rural Development.
In a single vote, the aldermen approved three resolutions that cleared the way for the agreement’s implementation, two to allow mayor Kelly Wolfe and Town Attorney Jim Wheeler to further negotiate and enter a $1 million purchase agreement and the $45,000 annual lease with ISC, and the third to add the $1 million cost of the building to the town’s application for Rural Development funding for construction of its new senior center.
The aldermen approved the resolutions in a 3 to 0 vote with Jerome Fitzgerald absent and Wolfe, as is his practice as mayor, reserving his vote for use only in the event of a tie vote among the aldermen.
Citing the financial condition of ISC, which only last month emerged from Chapter 11 bankruptcy initiated by its default on the building, Chuck Vest, who made the motion for the resolutions’ approval, and Mary Gearhart, who seconded the motion, both said they were initially opposed to the agreement but had reversed positions.
Gearhart said while she was angered by ISC’s situation and felt “the town had suffered an international black eye,” terms of the agreement including $90,000 in “up front” money from ISC to be held in escrow to cover two years’ worth of lease payments in the event ISC can not meet the payments have satisfied her concern.
Vest said, in the end, “some deals are just too good to pass up.”
In a similar 3 to 0 vote, the board approved a two-page amendment to the resolutions that Wheeler said were needed to give he and Wolfe greater flexibility in negotiating the final agreement “in a tight time frame.” “It needs to go to Rural Development tomorrow. It goes to ISC in the morning,” Wheeler said.
Wolfe, who has been working on the agreement with ISC and Rural Development since before ISC filed bankruptcy in late 2010, said Monday the agreement will impact generations of Jonesborough by allowing ISC to maintain its venue in the iconic storytelling building in Jonesborough’s historic district and by allowing the town to accomplish goals including the establishment of visitors center services in the downtown area and expansion of seating and space for town programming.
The agreement calls for Rural Development to loan the town the $1 million to purchase the building from ISC and to accept the $1 million ISC receives in full satisfaction of the $1.3 million lien Rural Development holds on the building as a result of ISC’s default on Rural Development loans for its construction.
Rural Development has further agreed to add the $1 million the town borrows to purchase the building to the existing application for $2.3 million in Rural Development funding for construction of Jonesborough’s new Senior Center.
ISC has agreed to lease the building, with the exception of its gift shop, from Jonesborough for $45,000 annually, or the same amount in annual debt service the town will owe Rural Development on the loan for its purchase.
The town proposes to use the gift shop to establish a visitors center annex that has been recommended for the downtown historic district in tourism studies and for a headquarters for the town’s participation in the Tennessee Main Street program.