Council shies from demolishing Beacon Light


Council gives owner fourteen days to submit plans, evidence of financing

Although current Beacon Light owner Sharif Abdehalim was not signed up to speak during the Henderson City Council’s update on the status of the Beacon Light property during yesterday’s meeting, City Manager Ray Griffin recommended to the council that it would be appropriate for him to make remarks.

Griffin summarized his communication with Abdehalim since the council approved an ordinance to demolish Beacon Light on August 10, 2009. The council resolved on that date to allow Abdehalim 45 days from the date of the ordinance to submit a plan for bringing the Beacon Light property up to city code within “a reasonable amount of time”, and it also stipulated that the owner must produce a letter of credit for 1.5 times the estimated cost of demolishing the buildings on the property.

During a Henderson City Council Land Planning & Development meeting on August 21, 2009, Abdehalim stated emphatically that he “cannot and will not” submit a letter of credit to the city.

Abdehalim’s 45 day grace period expired on October 1, 2009.

In a detailed breakdown of the issue, Griffin explained that Abdehalim would not provide the letter of credit. He also characterized the developer’s plan for home ownership as “more ad hoc that detailed”. The city manager indicated that the issue was whether to proceed with demolition or accept Abdehalim’s plan of action without a letter of credit.

According to Griffin, the Department of Housing & Urban Development (HUD) has stated that there is no procedure for the city to “tap into” the $1.2 million cash bond that Abdehalim has with that federal agency. Griffin, however, insisted that the city needs “financial security to provide for the demolition of the property should the owner be unable or unwilling to renovate the property and bring it into compliance.”

The cost of demolition is estimated at $250,000. The council would therefore require a letter of credit amounting to $375,000.

Abdehalim told the council that he understands the reason for the requirement of the letter of credit. He said that he would do whatever HUD and the city require him to do.

“I’m not going to lose my money,” Abdehalim said, a phrase he repeated often during the discussion.

When asked whether HUD had granted him an extension to perform the renovation work, the developer was unclear. Subsequent conversation revealed that he has not yet been granted an extension.

City Attorney John Zollicoffer asked Abdehalim on two separate occasions during the discussion how much insurance money he had received from the various building fires on the property. He noted that his deed from HUD requires that insurance money received as a result of fire or other destruction of the property must be used in the renovation of the property.

“The insurance issue is my problem,” Abdehalim said. He also stated that he was not responsible because no one had given him the “go-ahead” to do the work.

“You’re saying that the city council stopped you from doing this for the last two years?” council member Mike Rainey asked.

“I don’t want to blame anyone,” Abdehalim replied.

“You just did,” Rainey rejoined.

Griffin explained that if the demolition order is not kept in place, the city will have to start seeking another order all over again, a process that takes between six and eight months. He said that the city is trying to create an incentive for the owner to do the work and do it in a timely fashion. He said that the letter of credit was needed locally because the cash bond held by HUD would cover that agency’s losses, but would not correct the “local blight”.

Member Mike Inscoe asked Abdehalim if he had secured financing for the project. The developer responded that he had. Inscoe asked for evidence of the financing to be furnished.

Inscoe informed Abdehalim that a construction loan can be used to establish a letter of credit.

“I am confident that I will be able to do that,” Abdehalim said.

Zollicoffer noted that a letter of credit done in conjunction with a construction loan can be reduced pro rata as work proceeds on the project.

Griffin noted that a plan sent by Abdehalim by email on October 9, 2009 provided a timetable to October of 2011. That plan says that the burned buildings would be addressed in Phase 0, which presumably precedes seven phases of the overall plan. He also said that the plan was “variable” on the issue of home ownership.

Home in Henderson had requested a copy of the plan emailed to the city by Abdehalim.

Griffin also stated that the viability of Abdehalim’s overall plan depended on the ruling of the Zoning Board of Adjustment as part of the permitting process. Noting there was a concern expressed by property owners to the north of Beacon Light that the setbacks were too close (a fire on the Beacon Light property threw embers onto adjacent property to the north), it was determined that serious issues could arise if the buildings could not be rehabilitated on the same “footprint” as the original complex, as it would require a considerable reworking of infrastructure.

Inscoe told members that the Zoning Board of Adjustment would require detailed plans as part of its deliberation.

Griffin informed the council during the discussion that the situation with Beacon Light is rare among former HUD properties, with only one other in the nation being demolished because of “a similar situation”.

Member Garry Daeke chastised Abdehalim for not meeting the 45 day deadline.

“Communication works really well when deadlines are met,” Daeke said.

Abdehalim apparently lost his patience with the council soon after Daeke spoke, telling members that it was “their attitude” that had prevented the work from taking place.

“I suggest you choose your words carefully,” Henderson Mayor Pete O’Geary cautioned.

At that point, real estate agent and Vance County Commissioner Terry Garrison intervened in the discussion. Garrison first tried to excuse the conflict as a “language barrier”. He asked the council if they would consider giving the owner six months to show good faith.

In the end, at the suggestion of Griffin, action was delayed until the council’s next meeting on October 24, 2009. At that time, Abdehalim is required to submit evidence of financing dedicated to the project as well as a more detailed plan of action.

Before the vote was taken, Abdehalim threatened the city with a lawsuit by stating, “I will fight in an action what we consider injustice”.

The vote was unanimous, with council member Bernard Alston absent and Daeke out of the council chamber when the vote took place.