Plant B: It’s a shell game

Thomasville to vote on nuisance ordinance
Jan. 09, 2013 @ 01:53 PM

Thimblerig is a game most people have played or seen at some point in their lives. It's quite simple: a pea or something similar in size is placed under one of three shells and the goal is to pick under which of the shells the object is hidden. The game actually is more of a trick because anyone skilled in the art of Thimblerig easily can manipulate the outcome through simple sleight of hand.
Entering their third year of the former Thomasville Furniture Industries Plant B saga, Chair City officials are tired of playing Thimblerig with property owner Jeff Schwarz and have formulated a course of action that may finally end the issue of the 100-year-old eyesore. Following unsuccessful attempts to resolve the Plant B situation with a pair of LLCs and Randolph Bank, City Attorney Paul Mitchell and City Manager Kelly Craver are moving forward with what is called a "progression enforcement" in an effort to avoid spending nearly half a million dollars of taxpayer money.   
"Our biggest issue is dealing with a moving target," Craver told the Times on Tuesday morning. "We've dealt with two LLCs and a bank inside of two years. It's a shell game of who owns it today. The key here is to try and find the right strategy to get this problem remedied while investing the smallest amount of citizen dollars to make it happen."
On Jan, 21, Mitchell said an ordinance will be presented to City Council at its monthly meeting. The ordinance will direct Fisher Ferry LLC, the latest Schwarz company to claim ownership of the property, to abate the nuisance associated with the dilapidated structure. While Mitchell doesn't expect Fisher Ferry LLC to take any action, as it does not have the estimated $400,000 needed to demolish the plant, the ordinance authorizes city personnel to begin the nuisance abatement process, including the placement of liens against the property for repairs, cleanup or demolition expenses. 
"We're pursuing what is called a staged or progression enforcement," said Mitchell. "This is part of the legal process. It's one thing to disobey a building inspector, it's another to disobey a council. That could provide a springboard to begin a civil action in court and let a judge issue the orders. It's a possibility and may not be too far away. It can be against the LLC or the officers of the LLC."
By passing the ordinance to abate the nuisance, the city can take certain steps at the site to ensure public safety and improve neighborhood attractiveness. Mitchell said the city could elect to demolish  parts or all of the plant, begin the removal of asbestos from the building or simply maintain the temporary fence, and place liens against the property along the way.
"Council already has said what they really need down there is to have this thing torn down," Mitchell said. "The beauty of this approach is there is some value to the property or parts of the property. If the city spends $50,000 on asbestos remediation or partial demolition or fence security or all of the above we can file a lien and sell parts of the property. It has some value. A careful buyer may be interested in buying it."
According to Mitchell, Schwarz is known for buying properties and flipping them for profit. When the real estate boom dried up, Schwarz, in an effort to cut his losses, authorized agents to cannibalize buildings, stripping them of any valuable metals. The result was many buildings were left like Plant B — rundown public safety hazards.
Thomasville's tumultuous relationship with Schwarz began on May 27, 2011, when a section of a cannibalized building owned by Schwarz Properties LLC collapsed onto West Main Street Garage, 304 W, Main St., causing damage to several vehicles. A lawsuit was filed but eventually dismissed due to the fact none of the cars were owned by the garage. Mitchell said the incident raised concerns regarding liability and whether Schwarz's actions were endangering the public. 
"The reason I'm jumping up and down on West Main Garage is it's one thing for Jeff Schwarz to have Schwarz Properties LLC and to rent [the building] and maybe even cannibalize it," said Mitchell. "But when it starts harming life and limb the district attorney, who we've been talking with, or even a judge may pierce the corporate veil and say ‘Mr. Schwarz a kid went in there and died. You knew because Thomasville put you on notice.’ The kid's parent's lawyer can sue the LLC and him personally. "
During this same time period, cannibalization also occurred at Plant B, where Craver said conveyor systems were removed, leaving gaping holes in the floor. On June 22, 2011, after Schwarz lost the building to foreclosure, the city commenced remedial proceedings against Randolph Rank, which then held title to the plant. A few weeks later, the city issued an order to abate the nuisance at the site. Over the next several months, representatives from Randolph Bank appeared at council meetings saying efforts were being made to resolve the matter.
Nothing happened.
“The bank never should have assumed the title,” Mitchell said. “They should have tried to sell it. Taking the title was a mistake.”
On May 15, 2012, Randolph Bank conveyed the property to the freshly created Fisher Ferry LLC, owned by Schwarz, which listed Plant B as its only asset. Council members seemed hopeful of a remedy, but despite the erection of a temporary protective fence around the site, no further action was taken to abate the nuisance. In October, council entered a civil action order to abate the nuisance against Fisher Ferry LLC.
"Schwarz properties has property all over the Piedmont but it's kind of telltale that he put this one property under an LLC with no other assets," said Mitchell.   
Craver said the cost burden shouldn't fall onto taxpayer shoulders. 
"The citizens of Thomasville didn't create this problem and they shouldn't have to shell out $400,000 to make this thing safe," Craver sad. "The building is not structurally sound. The strategy of abating the nuisance is we've also got to protect the taxpayer's assets. Unfortunately, it's not a standard nuisance situation, standard demolition or standard lien because of its order of magnitude. We spend $5,000 to $7,000 on a demolition multiple times a year and sometimes we do end up going in the hole. That's part of doing business, but this is in no way, shape or form a normal part of doing city business." 
Cannibalizing properties is an issue the city will continue monitoring. Mitchell said the city had to issue an order last year stopping businessman Phil Isom from gutting the old Thomasville Furniture Industries Plant D building. 
"We were not accustomed to the concept of people tearing down their own properties," said Mitchell. "We were fooled when these buildings started falling apart. You need a permit to demolish or cannibalize. We have other empty furniture buildings and we're obviously going to be watching them and other investments like a hawk."
Craver said that city will remain vigilant in its efforts to protect the public from any safety hazards at Plant B, and doing so through proper channels ensures there will be no mistake should the matter come up in court.
"They certainly can't say they didn't know it was a hazard," Craver said. "Taking the ostrich defense would be horrible. You've got a neighborhood close by and they are very concerned that it detracts from their property value. We want to keep people away from the building so it doesn't fall on them. From the city's standpoint that has to be Job One."
Mitchell said the first order business will probably be to address the asbestos situation at the site. The property sits in a floodplain, making it difficult to develop, but Mitchell said the land could be turned into a walking trail.
High Point faced a similar situation regarding a Schwarz property and elected to move forward with demolition using taxpayer dollars. Thomasville views that option as a last resort. 

 

Staff Writer Eliot Duke can be reached at 888-3578, or duke@tvilletimes.com.