Real Estate - Commercial

Brooklyn Arts District Still Lacks Arts Center

By Josh Splilker, posted Mar 5, 2010
Brooklyn Arts: The building on North Fourth has a bidder.

On North Fourth Street, there is a Brooklyn Arts District, but no Brooklyn Arts Center.

And what was supposed to be a centerpiece in the redevelopment of North Fourth has essentially ended its term as a non-profit.

The next incarnation may be in the hands of someone who has been in the process all along. The non-profit entity, Brooklyn Arts Center at St. Andrews, Inc. will disband once the property at 520 N. Fourth St. is sold.

“Once the culmination of that sale takes place, then the board of Brooklyn Arts Center will disband,” said board president Chappy Valente.

According to Don Britt, a lawyer representing the Brooklyn Arts Center, the sale is being arranged with a familiar face to those involved with the Brooklyn Arts Center – David Nathans.

Nathans, a contractor with Urban Building Development Corp., was part of Northside Progress, the LLC formed to receive the North Fourth Street property after an approved RFP from the city in 2002. Nathans partnered with downtown developer Gene Merritt. In addition to the old St. Andrews Church building, they were also given the firehouse and adjacent manse to the church, which was rehabilitated by Nathans’ company, Urban Building Development Corp. Urban Building’s offices are in the manse house as well as the offices of the Historic Wilmington Foundation.

The bid from Northside Progress was to rehabilitate the church building and sanctuary into a multi-purpose events space with offices for local arts and non-profit groups, like a “larger nicer version of the St. Thomas Preservation Hall,” said former executive director Erin Diener.

The church building sanctuary was in severe decline. The building’s brick exterior, roof, interior all needed sufficient work. The building also had to be brought up to new codes.

To fully renovate the building, about $6 million was needed. Trying to raise that amount was difficult, and the amount needed may have been as high as $10 million, according to Diener.

Diener said that when she first came to Brooklyn Arts in 2006, the proposal for an arts center had greatly underestimated the cost.

“What was pretty evident in the first 6 months of my tenure was that no one had ever done a feasibility study to see if that money would be enough for the adaptive reuse, and two, was it feasible to raise that type of money and would that center work?” Diener said.

Another major issue is parking. The building was established in the late 1800s and like many downtown buildings at the time, there was no parking lot. And there was no room surrounding the church sanctuary for a parking lot. This was going to affect the building’s use for possible arts productions. A redevelopment proposal mentioned that “an inherent lack of/absence of safe and adequate parking has a significant effect on an arts-based business’ bottom line.”

In addition to these issues, there was no guarantee that the Arts Center could sustain itself. An
“informal” 2007 feasibility study cited in the redevelopment proposal says that any community arts center would only be able to recoup 25 to 60 percent of an estimated $900,000 operating cost.

The Brooklyn Arts Center was put in a fundraising conundrum: how to raise the $6 million plus operating costs, with no name recognition, in an underdeveloped part of town with more than 30 plus concurrent capital campaigns in 2007, according to the redevelopment proposal. As a new non-profit in a redeveloping part of town, it was hard to find donors to support the idea.

“There were other organizations with higher name recognition than the BAC (Brooklyn Arts Center) that started capital campaigns, and there are only so many donors in this community,” Valente said. “We didn’t have the sex appeal, we didn’t have the program for people to rally behind, and it just turned out to be too much for something to happen.”

Diener and other board members applied for grant funds and eventually raised more than $600,000.

An advantage that turned to a hurdle for the group was the involvement of Merritt and Nathans, in their role as developers but also as members of the board. Dave Nathans was also the contractor on the work for the church. Merritt and Nathans were also the president and vice-president of the Brooklyn Arts Center board.

“It makes sense to put a stipulation that Dave Nathans and Gene Merritt serve on the board, but the city came into issue as to why the city allowed Dave Nathans to be the contractor on that. It got a little too close for comfort. I can’t fault Dave Nathans, because he was doing what the city allowed him to do,” Diener said. “To pay a board member for goods and services rendered can present a conflict of interest…that put Dave Nathans in a precarious position.”

According to records from the Brooklyn Arts Center, board members were asked to sign conflict of interest forms in 2007. The form made exceptions for Nathans.

Merritt said that he didn’t think there was any conflict of interest involved in having Nathans do some of the work on the church. There is still a sign on the side of the church building on North Fourth St. for Urban Building Development Corp.

“I never thought it was a conflict of interest, I guess one could make that claim I suppose. I never saw it as one, I never saw it as a problem because I knew that (Nathans) would do the right thing in terms of getting the best price,” Merritt said.

Part of the deal with the city was that Northside Progress would renovate the firehouse and manse and put $500,000 towards the renovation of the Brooklyn Arts Center.

In that regard, part of the deal with the city was a success in that it opened up new commercial space on North Fourth Street.

Eventually, according to Diener and Nathans, the board decided to let Nathans off the board sometime in 2007. Merritt left the board in April 2007. Diener said that the decision centered on the possibility of a conflict of interest with Nathans being on the board and a contractor, and Nathans said it was a difference in vision and direction.

“When it became apparent, (Nathans) either had to be one thing or the other, a member of the board of directors or the general contractor on the adaptive reuse of the building, Dave agreed to step down from the board to allow him to do what he did best – which was being the general contractor,” Diener said. “The main reason that Dave Nathans stepped down was because of that conflict of interest.”

In 2007, Northside Progress transferred the deed of the St. Andrews Church property to the Brooklyn Arts Center non-profit. After evaluating the possibilities for a non-profit arts center to open in that location, the board made a decision to sell the property on the open market. The Wilmington City Council agreed to allow the property to be sold for use other than a multi-purpose arts facility.

The only bidder was Nathans.

According to Britt, the sales price of the church was for $385,000. Britt said that due to some HUD loans and other liens on the property, it has not been sold in full to Nathans. Britt said that if those cannot be worked through, it will not be sold to Nathans. Also, the sale stipulates room for an arts council.

Nathans said that he hopes to accomplish what the original RFP from Northside Progress in 2002 hoped to accomplish: establish a multi-purpose events facility. Nathans cited weddings, banquets and even the possibility of a downtown skatepark for a “multipurpose arts & entertainment” building. Some previous considerations, like a large commercial kitchen, may not be done. He also said that he wants to renovate the sanctuary, then move to the other sections.

Nathans also hopes to keep the name Brooklyn Arts Center. Nathans, as much as anyone, has a lot of time and money invested in the property. He says he looks forward to fulfilling the original vision that he and Merritt had for it years ago and the vision that Nathans continues to have in redeveloping that part of Wilmington.

“I’m very excited about it again and grateful to have the opportunity to fulfill the original plan for that building, I still think it’s a great asset to the neighborhood,” he said.

Though the non-profit arts center has not come to fruition, the effort on North Fourth is continuing. New accomplishments have been done in the past decade, including a new residential development, the MLK Parkway and a new multi-modal transportation facility.

“Having put some money in the facility and [making]  a significant effort to save it, I think that effort has resulted in the recent development that surrounds it,” said Wilmington City Councilmember and Brooklyn Arts Center board member Laura Padgett. “One of the main purposes was to remove blight on North Fourth Street. Surely that has occurred.”

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