Morganton's East Meeting Street Housing Project Faces Delay Due to Legal Snag, City Council Confirms Commitment

Morganton will have to wait a little longer for the proposed housing project on East Meeting Street to come to fruition, but it’s still a done deal, the city says.

City Council approved a budget amendment to accept a transfer of $425,000 into its Capital Reserve Fund for purchase of the property by the developers, 400 Meeting Street, LLC, at Monday’s regular monthly meeting.

The deal is in limbo, though. 

Because of a legal issue, the buyer can’t yet close on the 1.7 acre property on East Meeting Street between White and Church Streets.

City Attorney Louis Vinay explained the buyers, Nicholas Parker and Kristin Pruitt, requested an attorney perform a full title search on the property. The search turned up an irregularity in the description of one of the six parcels involved in the purchase.

The legal issue amounts to little more than a relic from the distant past, but it’s enough to delay the closing for six months or more.

“The problem has to do with the description of this particular lot, and it’s nothing that anyone missed, because it’s been the same deed description since 1946,” Vinay said. “But their title-searching attorney and their title insurance company felt this was a problem that had to be dealt with.”

“We thought that had been resolved by the city agreeing to sign an indemnity agreement with the title company,” Vinay continued. “But unfortunately, the investors who are supporting the buyer/developer wanted more than that, and they want that issue cleared up, which would require legal action. So, they are not ready to close at this time. However, they still definitely want to proceed with the project.”

Vinay said the developers have already deposited with their lawyer the full purchase price and have indicated they see the situation as a temporary delay.

“From the city’s point of view, your only choices are either to tolerate a delay or to cancel the entire deal, which I don’t think anyone wants to do,” he said. 

Council, showing no desire to throw the baby out with the bathwater, approved the budget amendment unanimously.

“For perspective, we’re talking about a $25 to $30 million project,” said City Manager Sally Sandy. “We’re not talking about a $150,000 project across the street. So there are a lot of steps and a lot of hoops and a lot of things. In talking with all of them, I don’t think we’re in any jeopardy at all of losing the project.” 

Council approved the sale in its November meeting, and 400 Meeting Street presented conceptual drawings of how the finished project might look to council. Parker said the group envisions 16 three-story townhouses and 54 traditional walk-up flats. Amenities would include covered parking, a playground, a dog play lot, and rooftop terraces.

At the time, Vinay anticipated the closing would occur within a week, but that was before the ancient legal issue reared its head.

OTHER ACTION BY CITY COUNCIL

In addition, the council approved another budget amendment to accept additional Dogwood Trust grant funding in the amount of $350,000 for the Bost Road sewer project. The money is over and above the $1.7 million Dogwood had already granted the city for the project, and will free up dollars the city had previously appropriated for the work from its ARPA (American Rescue Plan Act) fund.

In other action at the meeting, council approved a consent agenda that included, among other things, a change order to the original design package for the Silver Creek pump station project, which will add $67,000 to the previously approved total of $292,300. The project is funded by a state grant of $1.1 million.

Marty Queen is the senior reporter for The Paper. He may be reached at 828-445-8595 or at marty@thepaper.media.