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Local Hoteliers File Lawsuit to Stop Public Financing
 for Downtown Greensboro Hotel Project

By Joe Killian, News and Record, Greensboro, N.C.McClatchy-Tribune Regional News

February 12, 2010 --GREENSBORO -- Local hoteliers Dennis Quaintance and Mike Weaver sued Thursday to stop the potential financing of a new luxury hotel in downtown Greensboro.

The two men -- owners of the city's O. Henry and Proximity hotels -- want to invalidate the federal stimulus financing the City Council and Guilford County Board of Commissioners recently approved for the project.

They have created a Web site -- www.gogreensboro.net -- to post their legal reasoning and some of their arguments against the new hotel, which they believe is not economically viable and could hurt the hotel industry throughout the city.

Representatives of the Urban Hotel Group, which is proposing the downtown project, could not be reached for comment Thursday.

Greensboro and Guilford County have a great opportunity in the bond financing, Quaintance said in an interview Thursday, and locally elected officials need to make sure it's used as best it can be.

"In order to take full advantage and give this area the stimulus it needs, you have to have a good process," Quaintance said. "And in the process we've seen, there's just no criteria. There's no evaluation of these projects."

The proposed 200-room luxury hotel is a $54 million project. Investors are seeking $27 million in special federal bond financing available through the city and county.

The hotel would overlook the International Civil Rights Center & Museum at Elm Street and February One Place. It would be 51 percent black-owned. A small part of the profits would go to the Ole Asheboro Neighborhood Association , a historically black community.

Some of the project's supporters have accused critics of being motivated by race and by the fear of a competing hotel taking away business.

"What this is being driven by is our concern for the potential effect of this," Weaver said Thursday.

"The whole thing has been pushed so fast with a lack of a real businesslike approach. I'm very pro-downtown, but I don't want to see just anything built there," Weaver said.

"I want to see things there that can succeed and thrive, so that downtown can continue to improve."

Weaver and Quaintance also have raised questions of a conflict of interest on the project. Melvin "Skip" Alston , chairman of the Guilford County Board of Commissioners, is a broker in the deal. He has been accused of trying to intimidate opponents of the project.

Earlier this month, Alston apologized for telling Mayor Bill Knight and two other City Council members that they could face a recall election if they reconsidered approval of the hotel's financing.

Alston recused himself from the commissioners' vote to approve the financing. He did not disclose his relationship with the developers to his fellow commissioners as they weighed the projects being considered. Alston has declined to disclose how much he stands to make on the deal.

He said last week he would no longer speak publicly on the deal. He could not be reached for comment Thursday.

Many members of the City Council and Board of Commissioners -- including Knight -- declined to comment on the lawsuit .

City Councilman Danny Thompson did comment.

"They have the right to take this to court," Thompson said. "It's part of that great system of checks and balances we have in this country. Just because one government body says something, that's not the end of the conversation. I love that process."

Thompson said both the City Council and the county commissioners faced a vote on the bond projects without much guidance from the state or federal government as to what their role was and how much they should vet the projects.

"I'm certainly open to whatever kind of guidance we can get on this," Thompson said. "If that comes from the federal level, the state or from the courts, I'm open to it."

The hotel project is now before the county's bond authority, which has asked for more information on the financial structure of the project before sending it to the Local Government Commission for final approval.

At the bond authority's last meeting, an attorney for the hotel group said the ownership group was reluctant to provide any more information but would work with the county attorney to see what it could do.

Contact Joe Killian at 373-7023 or joe.killian@news-record.com

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Copyright (c) 2010, News and Record, Greensboro, N.C.

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