Journey to the Earl Scruggs Center Continued… Pt-6

Resident Addresses County Commissioners About DCC’s Lease Agreement Violations

In the citizens recognition portion at the beginning of the December 18, 2012 County Commissioners Meeting, Cleveland County Resident Brendan LeGrand gave the Board a prepared statement reminding the Commissioners that DCC has not obeyed the terms of the Lease Agreement, and she listed the violations of the agreement:

#16. Naming Rights– Lessee shall not have the right to name rooms. She gave them the Honorary Naming Opportunities schedule where they sold rights to name Courtroom $250,000; Rotunda $100,000; Major Exhibit Room #1 $250,000; Elevator $50,000; Café $50,000; and offer other naming opportunities for Exhibit Rooms #2, #3, and #4 for $250,000 each and Resource Center and Conference Room for $100,000.

#17. Restored Courtroom-Lease said the courtroom would be restored and DCC said they would restore it to its previous grandeur, but the courtroom has been stripped and its history destroyed. She gave them a photo of the old courtroom and a photo of DCC’s renovations to the courtroom that they now call the “Great Hall.”

#14. Commencement and Completion of Renovation– Lessee shall commence renovations to the leased property within 12 months from the date of the lease. It was three years before DCC began renovations of the building.

#20. Default of the Lease– (c) Lessee fails to fulfill any duty or obligation imposed by the lease- They defaulted when they did not fulfill the duty or obligation imposed by #14 of the lease that said they had to begin renovations of the building in 12 months.

#5 Use– Lessee shall be entitled to use the property for the purpose of maintaining and operating “The Earl Scruggs Center-Songs and Stories of the Carolina Foothills.” Now they have changed their name to the “Earl Scruggs Center-Music & Stories from the American South.

#14. Commencement and Completion of Renovation– All renovations shall be completed and the Center to be located in the leased property shall be operational within 60 months from the date of the lease. If the Earl Scruggs Center is not open by March 18, 2013, DCC again defaults on the lease #20 (c).

County Commissioners Approve A Loan Of $755,400 To DCC

At the December 18, 2012 County Commissioners Meeting, County Manager Eddie Bailes says he has reviewed the current pledges that DCC has and he feels there are adequate pledges to cover a loan of $755,400 to DCC.

He noted that should the county grant DCC a loan of $755,400 and they are approved to borrow the remaining funds required to open, the Earl Scruggs Center should be able to open within six months.

Since DCC cannot borrow against the building, the current contents of the building (fixtures, display cases, etc.) will be used as collateral for the loan.

During the last meeting, it was brought up that the lease with DCC was scheduled to expire in March. Commissioner Holbrook recommended that the county not only consider giving DCC the loan but have deeper discussions regarding the extension of the lease.

Commissioners were concerned with loaning DCC the money and them being unable to secure a second loan. J.T. Scruggs said DCC will not spend any of the loan from the county until the EDA grant is secured.

DCC has been working securing another loan. If DCC gets indication of approval, they will go to EDA to request an extension

The Commissioners voted unanimously to grant DCC a loan of $755,400 contingent upon a second loan being approved by a lending agent and the EDA grant being extended after an opening date has been set. The loan to the county is to be repaid by the year 2020 with the current pledges being used to pay back the loan.

What Will Be The Real Impact On The Economy Of DCC’s Projects?

Armed with their economic impact studies done by Gardner-Webb University projecting $18-$20 million a year, Destination Cleveland County sold the County Commissioners and the City Council on the idea of the Earl Scruggs Center and the Don Gibson Theatre.

These governing boards bought into DCC’s dream and in turn sold it to the people, leasing taxpayers’ buildings to DCC for $1 a year, and funneling taxpayers’ money into them for renovations.

As time has passed, even The Star, who has called those who questioned the impact of these venues “Debbie Downers” and “naysayers” seems to be backing off of DCC’s projections of the potential economic impact of their projects.

In an editorial in The Star on July 15, 2012, the editor says, “Even if the Scruggs Center only brings in a fraction of the projected economic benefit, it will be a welcomed jolt for our region.”

Another editorial in The Star on December 30, 2012 says of the Earl Scruggs Center, “ Even if it just ends up being a wash, what a great new jewel to add to the county’s crown!”

A fraction of the projected economic benefit, or a wash, is not what these projects were billed as. Can our depressed local economy afford jewels in our crown?