Echelon Partner Outlines Plans for Old School in Presentation at Palace Theater

Echelon Resources partner David McCormack outlines plans to convert old school into 17 one-bedroom apartments during Saturday morning’s Town information meeting.

Cape Charles Wave

July 22, 2012

Echelon Resources partner David McCormack came to town yesterday to tell the public about his company’s plans for the old school at Central Park. Over 100 people attended the Town information meeting at the Palace Theater.

About a year ago during a visit to the Eastern Shore, McCormack said, he “happened to notice that the old school was there.” His specialty is adaptive reuse of old buildings, so he investigated and was shown the school by town staff sometime last summer. In August, he and his partner, Edwin Gaskin, sent a confidential unsolicited proposal to the town to purchase the building.

Town staff negotiated in secret with Echelon until February 9, when Town Council held a public hearing as required before selling public property. Local resistance has mounted since that time, but until July 10, no Echelon representative had provided any information to the public about the company’s plan to convert the old school into a 17-unit apartment building.

McCormack attended the July 10 meeting of the Cape Charles Planning Commission and gave a slide show. Yesterday he repeated his presentation for the general public.

Although McCormack emphasized that he was “happy to answer any questions,” Vice Mayor Chris Bannon was not in agreement. The rules according to Bannon were that no question was to be asked about the contract signed by Mayor Dora Sullivan with Echelon or about required zoning changes. Such questions “should be directed to the Town Manager in writing,” Bannon twice emphasized.

In his presentation, McCormack gave an overview of Echelon projects in recent years. Echelon and its development partners have invested $80 million in historic redevelopment in Virginia, he said, assisted with tax credits from the Virginia Department of Historic Resources and the National Park Service.

Without tax credits, Echelon’s adaptive reuse projects would not be attractive to a commercial lenders, McCormack said.

Echelon has rehabilitated two schools, several manufacturing properties, and an old hospital in areas including Richmond, Petersburg, and Fredericksburg.

Echelon plans to pump $2 million into the Cape Charles old school, McCormack said.

McCormack got a laugh from the audience when he told about turning the old Maury School in Fredericksburg into an apartment building. The former principal of the Maury School now resides in that apartment complex, he said – and in fact lives in what used to be his principal’s office.

McCormack maintained that adaptive reuse projects are by their nature “green,” because so many materials are preserved or reused. He said they even like to keep the old chalkboards on the walls, for residents to use to write notes on.

During the question and answer session, Dennis Pickeron asked if Echelon screened its prospective tenants. McCormack assured him that applicants would undergo both police checks and credit checks. Convicted felons and sex offenders would not be accepted, he said.

McCormack said the old school apartments would rent for “market rates,” which he estimated at $650-$700 per month, plus utilities, for the one-bedroom units.

Laurie Klingel asked what Echelon would do about a buffer zone between the apartment house parking lot and the park playground. McCormack said he had not focused on that, but that the playground entrance next to the parking lot would be closed off. “I don’t see any big impact,” he said.

Echelon Resources partner David McCormack lives in Petersburg but has ties to Nassawadox.

Jean Johnson said that as a Cape Charles landlord, she finds it “a constant problem” to keep her properties rented. She asked McCormack why he believed that Cape Charles would be a good rental market. McCormack replied that he believed the apartments would attract “new residents” to Cape Charles. As an example, he cited a friend who likes to come to the Eastern Shore to fish. Perhaps his fisherman friend would decide to rent an apartment, McCormack suggested. He also clarified that he did not see any “short term rentals — except for corporate housing.”

Susan Bauer asked if the project would create jobs in the Town. “We do as much as we can to use local contractors and trades,” McCormack said, noting that the $12 bridge toll was a good reason for employing locals.

Ron Wrucke asked how much money Echelon has paid municipalities for other school buildings. (Echelon is paying $10 for the Cape Charles school, and will receive a $41,000 insurance payment from the Town.) “The purchase price is not the important concept,” McCormack replied — “what’s negotiated is relevant.” He noted, for example, that in the case of the school his firm purchased in Hopewell, Echelon agreed to construct a $100,000 sports locker room as well as a public auditorium, but received tax abatements and free water hookup in return.

Wayne Creed asked how Echelon plans to deal with asbestos in the school. McCormack said everything would be done according to government regulations.

In other responses, McCormack said there would be no elevator in the building; that Echelon does not plan to sell the building after completion; and that financing for the project was already assured. “If we do not get financing, we will not take possession of the building,” he said — “but we already have financing promised.”

When Town Council member Frank Wendell rose to ask a question, Vice Mayor Bannon stopped him, stating that questions were “only allowed from private citizens.”

“I haven’t given up being a member of the public,” Wendell protested. Afterward, he noted that other council members had no questions because “they were all there for the privileged executive sessions . . . the whole deal was done in closed session.”



11 Responses to “Echelon Partner Outlines Plans for Old School in Presentation at Palace Theater”

  1. Marita Patterson on July 23rd, 2012 8:11 am

    I didn’t hear Chris Bannon say “questions “only from private citizens’.”

    I remember hearing Vice Mayor Bannon tell Councilman Wendell that the public would be allowed to ask questions first, followed by any council members with questions.

  2. Peter Lawrence on July 23rd, 2012 12:54 pm

    To George and Dorie, I think the Wave has potential but not if you continue to exhibit journalistic biases by using words like secret instead of closed door meetings. There’s nothing secret about them. As you well know, it is announced in advance that the meetings are being held but for reasons cited in Virginia’s code, they are “closed door”.

    And Marita Patterson’s version of what Chris Bannon said is correct. Frank Wendell could have adressed the Echelon partner after everyone else spoke. He chose not to ask any questions. There’s no need to create an impression that there was an effort to silence him.

    You, and the residents who read the Wave, will be well served by reporting just the facts. Thank you for your efforts to cover the news in Northampton County.

  3. Mike Kuzma, Jr. on July 23rd, 2012 2:28 pm

    With the Project taking Federal and/or State money, if there is a rental deficiency whom will make up the loan payments if Echelon is not able to due to lack of operating cash flow? Is the Town on the hook?

    Will there be requirements for the Project to accept Section 8 or HUD tenants if there is a rental shortfall?

    The market is at best tenuous right now; won’t adding 17 units to the Cape Charles mix will do only one thing?……… locals who rent their places out now will have competition (Brand new stuff at that, far more attractive to short term renters), reducing your market and cutting into your incomes. Well, I sure hope all the local folks who have houses and mortgages to pay get theirs sold/rented first….

    In regards to Mr. Creed’s question regarding asbestos, has a comprehensive asbestos abatement plan been submitted to the Town, as requested? In accordance with the National Emission Standards for Hazardous Air Pollutants- Compliance Monitoring? Including lead as the building predates 1975? Frankly, until such a plan has been presented there is no reason to simply accept that “it will all be done according to Governement standards”….These are them(NESHAPs), let see the plan.

    Now that the Building Supply is closed, where will you be purchasing all your materials for the construction?

    One comment: Mr. McCormack indicated that ‘no short term rentals’ and speaks of a ‘friend’ who likes to fish the Eastern Shore…Hmm…….let’s see………he has about $825.00 a month carry costs for the apartment alone, plus dockage, plus gas, plus beer, plus bait, plus maintenance……how is this friend going to afford this? I’m pretty sure that Wallop’s has plenty of room up there for ‘corporate housing’……..

  4. Jean Johnson on July 23rd, 2012 4:22 pm

    To add to Mr. Kuzma’s point above, Cape Charles landlords will be competing with these 17 new properties that have significant cost advantages as a result of the significant government financial incentives this project will utilize. These include the 45% of renovations costs through federal and state rehabilitation credits; significant property tax and state income tax abatement; and the $41,000 the town is giving them from insurance proceeds. Moreover, loan rates are lower than when most current property owners purchased. Also, at the five-year mark, Echelon will be free to sell the properties, which is likely to be a more financially attractive option for them than being long-term landlords.

  5. Cape Charles Wave on July 23rd, 2012 5:56 pm

    GEORGE and DORIE RESPOND TO PETER LAWRENCE: Thank you for your thoughtful comments. Regarding the use of the word “secret,” please review the Virginia code, which we have quoted and cited in several articles. The meetings are not supposed to be “secret,” because although they are closed door, by law the Town must specifically state the subject being discussed. Cape Charles has long hidden behind the general phrase “Real Estate Acquisition Opportunity.” Virginia code states: “A general reference to . . . the subject matter of the closed meeting shall not be sufficient to satisfy the requirements for holding a closed meeting.” If the Town Council executive session stated that the agenda item was “Real Estate Acquisition Opportunity — Bank of America building,” THEN it would be a legitimate “closed door” meeting. Under current practice the meetings are “secret” and illegal.

  6. Peter Lawrence on August 1st, 2012 7:53 am

    I appreciate your response however I’m not sure what section of the code to which you refer. Did you ever contact the Town Clerk for her input? I was easy.Here is the actual section regarding the various reasons closed door meetings are allowed:

    § 2.2-3711. Closed meetings authorized for certain limited purposes(reason #3 regards aquisition of real estate).

    Please note the reason stated for specifically not listing the actual property.

    “3. Discussion or consideration of the acquisition of real property for a public purpose, or of the disposition of publicly held real property, where discussion in an open meeting would adversely affect the bargaining position or negotiating strategy of the public body.”

    The logic seems pretty well reasoned. Happy to learn about the section you are referring to.

  7. Marita Patterson on August 1st, 2012 8:39 am

    Thanks, Peter, for doing the research and giving us “the rest of the story”.

  8. George Southern on August 1st, 2012 1:56 pm

    In response to Peter and Marita’s comments above, here is the link to the Virgina code on requirements for closed door meetings:

    Please see in particular section A:

    “A general reference to . . . the subject matter of the closed meeting shall not be sufficient to satisfy the requirements for holding a closed meeting.”

    As I have written before, my problem is not with closed meetings, but rather with keeping secret the subject of the closed meeting. The Town Council was within its rights to discuss and negotiate privately the particulars of selling the old school and buying the bank building. The Town Council was NOT within its rights to keep secret from the public the fact that those closed meetings concerned the old school and the bank building.

    The reference cited above by Peter Lawrence refers to “discussion in an open meeting.” I never suggested that the meetings should have been open. I do maintain that under Virginia law, the SUBJECT MATTER of a closed meeting must be stated publicly. And, per section A above, a “general reference” to the subject matter is not sufficient. The subject must be specific, and in the case of real estate, that would mean naming the property to be discussed in closed session.

  9. Peter Lawrence on August 1st, 2012 4:31 pm

    Could you get it more wrong? The code section I referenced is specifically about Closed meetings(NOT OPEN AS YOU SUGGEST) and, strangely enough, immediately preceeds your section. See below:

    prev | next

    § 2.2-3711. Closed meetings authorized for certain limited purposes.

    A. Public bodies may hold closed meetings only for the following purposes:

    1. Discussion, consideration, or interviews of prospective candidates for employment; assignment, appointment, promotion, performance, demotion, salaries, disciplining, or resignation of specific public officers, appointees, or employees of any public body; and evaluation of performance of departments or schools of public institutions of higher education where such evaluation will necessarily involve discussion of the performance of specific individuals. Any teacher shall be permitted to be present during a closed meeting in which there is a discussion or consideration of a disciplinary matter that involves the teacher and some student and the student involved in the matter is present, provided the teacher makes a written request to be present to the presiding officer of the appropriate board.

    2. Discussion or consideration of admission or disciplinary matters or any other matters that would involve the disclosure of information contained in a scholastic record concerning any student of any Virginia public institution of higher education or any state school system. However, any such student, legal counsel and, if the student is a minor, the student’s parents or legal guardians shall be permitted to be present during the taking of testimony or presentation of evidence at a closed meeting, if such student, parents, or guardians so request in writing and such request is submitted to the presiding officer of the appropriate board.

    3. Discussion or consideration of the acquisition of real property for a public purpose, or of the disposition of publicly held real property, where discussion in an open meeting would adversely affect the bargaining position or negotiating strategy of the public body.

    I stopped copying the sections after #3 since that’s the one referring to “real property”. The Town Clerk consults their attorney to make sure the Town is in compliance. Maybe you should do the same. I’ll ask again, did you consult with the Town Clerk for her input? If not, do your subscribers a favor and ask her for her thoughts.

  10. George Southern on August 1st, 2012 8:43 pm

    The only response I can think of to the above is to ask that you read again what I already wrote. But that of course would be pointless. As would asking our town clerk (who I think does a great job but who serves at the pleasure of Town Council) if she is following the law. In the Northern Virginia city where I lived most recently (Falls Church), the clerk is elected and so is not under the control of the City Council. There, the clerk makes sure to SPECIFY the subject matter of a closed session. An example of an appropriate closed session agenda item would be: “Real Estate Acquisition Opportunity — Bank of America building.”

    I’ll close my part in this comment chain by quoting for the umpteenth time what the law states:

    “A general reference to . . . the subject matter of the closed meeting shall not be sufficient to satisfy the requirements for holding a closed meeting.”

    “Real Estate Acquisition Opportunity” is all we got for an agenda item. That is a “general reference” and does not satisfy the law for holding a closed meeting.

    “Real Estate Acquisition Opportunity — Bank of America building” is a specific reference, and would have satisfied the law for holding a closed meeting.

  11. Peter Lawrence on August 2nd, 2012 1:43 pm

    Just got off the phone with Alan at the Virginia Freedom of Information Advisory Council. We discussed sections 2.2 3711 that I cited and section 2.2 3712 that the Wave hangs its hat on. Alan confirmed that listing the specific property when announcing a closed door meeting for the purpose of discussing a potential real property issue is not required as it would defeat the entire purpose for having that meeting (“where public discussion would adversely affect the negotiating strategy as described in § 2.2-3711(A)(3) of the Code of Virginia”). He did say, however, that announcements should say something more than just “real property acquisition” since that mirrors the general purpose language in the code. Alan said there are lots of ways The Town of Cape Charles could have added an additional phrase like “on the western side of Town” or “to discuss possible locations for a new municipal (i.e. library) site. Bottom line, the Wave got it wrong . . . no need to mention the Bank of America building. Feel free to go to the Advisory Council’s website, go to searchable advisory opinions, Dec. ’09 AO-13-09 or call them at 804-225-3056 and ask for Alan.