Ownership and control of the Wilrik Hotel, one of downtown Sanford’s tallest and most historic buildings, has been awarded by a judge to the city of Sanford, according to documents on file with the Lee County Clerk of Court’s office.
Superior Court Judge Winston Gilchrist ordered on Aug. 31 that the Sanford Affordable Housing Development Corporation, the private nonprofit which has owned the Wilrik since 2013 and operated it since 2016, essentially dissolve and re-form as a board consisting of Sanford Mayor Chet Mann, Sanford City Councilwoman Rebecca Wyhof Salmon (whose ward includes the Wilrik), and Sanford Historic Preservation Commission Chairman Brian Mitchell. That group will have two years to appoint a successor board to oversee operations at the building. The Sanford Affordable Housing Development Corporation is also ordered to pay nearly $33,000 to the city to cover attorney fees and is enjoined from disposing any of its other properties.
The order comes after a lawsuit filed by the city in late 2019 seeking to regain control of the building. The city’s request for judgment was granted in February, but a hearing to determine the exact remedy was postponed following the outbreak of the COVID-19 pandemic.
The story goes back far further, though, to at least 2013, when the Sanford Housing Authority – which unlike the SAHDC is a federally-funded agency with board members appointed by city government – purported to have purchased the building from Duke Energy Corporation, promising to make between $50,000 and $75,000 in upgrades. In exchange, Sanford and Lee County governments agreed to forgive roughly half a million dollars in debt on the building’s seller and ensure it remained available exclusively as low income housing for five years, after which the living spaces could be converted into high end luxury apartments and possibly even retail space.
Instead, it was revealed in 2016 that it was actually the SAHDC which owned the building, and when the organization canceled its management contract with the SHA, the city no longer had any control of or involvement with the property, leaving no mechanism for enforcing the promises made three years earlier. A year later, the SAHDC’s remaining board member, Ben Gardner, reported a $100,000 embezzlement from the organization. Former board member Robert Woods was formally accused in that case in January, with his charges still pending.
Further, it was revealed in 2016 that federal tax credits associated with the property require it to remain as low income housing until at least 2027.
The city’s lawsuit claimed that Woods and Gardner engaged in the “systemic elimination” of any SAHDC board members who were still associated with the SHA and therefore “publicly accountable.” The result, claimed the complaint, was that Woods and Gardner alone remained in charge of a nonprofit board of directors which appointed its own members. Woods left the organization in 2017.
“The City would not have canceled its Deed of Trust on the Wilrik in 2013 if it understood (the SAHDC) to be a privately-controlled entity and not an entity controlled specifically by a public entity … over which the City exercised its own appointment authority,” the complaint read, going on to claim the January and February 2016 meetings at which members with public accountability were removed amount to “an unfair and deceptive trade practice” that has “alienated” “the City’s legal interest in oversight and de facto control” of the Wilrik.
The Rant has confirmed that city officials took possession of the building on Friday and are currently working to determine what assets and liabilities the SAHDC has. It’s currently unclear how many low income residents are housed at the Wilrik, what the condition of the property is, and what, if any, other properties the SAHDC controls.
Sanford Mayor Chet Mann said Monday that the hope for the time being is to hire a management company to oversee daily operations, and that current residents don’t need to be worried about finding another place to live.
“Right now, our biggest priority is to get in there, make sure the building is safe and see how we can help those people living there,” he said.