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City, project principals work out compromise for downtown distillery

It took some time, but Washington’s City Council and the principals behind the effort to convert the former Bank of America building downtown into a micro-distillery, restaurant and boutique hotel found a likely compromise regarding agreements related to a grant for the project.

That compromise is a simple document — a promissory note. That promissory note, according to city officials, would protect the city from being liable from having to repay the state of North Carolina if grant requirements — job-creation mandates — are not met. In recent years with similar grants, the city has required the beneficiary of the grant, not the city, to be responsible for satisfying any clawback provision that would require the state to be reimbursed if those requirements are not met.

During its meeting Monday, the council authorized the city manager and city attorney to work with Nick Sanders, a project principal, and his attorney to “clean up” a subrecipient agreement related to the $200,000 grant was awarded to help with converting the former Bank of America building into a mixed-use enterprise. That “clean up” is expected to take about three days. The subrecipient agreement makes The Hackney Distillery LLC responsible for any money that would be returned to the state if grant-agreement conditions are not met.

City Attorney Franz Holscher told the council he considered that provision of the subrecipient agreement somewhat unclear. During discussion concerning how to remedy that issue, Sanders told the council he was not prepared to immediately provide more money to assure the city would not be liable for repaying the state if the project did not meet required grant conditions.

As the discussion continued, Mayor Mac Hodges indicated his frustration with the matter. “We need to move forward. He’s (Sanders) been delayed, delayed, delayed,” Hodges said.

Eventually, it was determined that the promissory note was acceptable to Sanders and the city.

The grant comes from the Main Street Solutions Fund, an economic-development program within the N.C. Department of Commerce. It will be used to assist The Hackney Distillery LLC (owners Nick and Suzanne Sanders) in the first phase of rehabilitating the former bank building, into a distillery, destination restaurant and boutique hotel. A future second phase, not funded by this grant, will help to construct 14 boutique hotel rooms on the second and third floors.

Sanders, who recently moved from London to Washington with his wife, Suzanne, told the council in December that growth of the distillery and micro-distillery industry is a “global trend.” Sanders said he is ready to commit $775,000 in addition to grant funding to rehabilitate the former bank building. He also said The Hackney Distillery LLC would provide any matching funds the grant agreement would require.

About Mike Voss

Mike Voss is the contributing editor at the Washington Daily News. He has a daughter and four grandchildren. Except for nearly six years he worked at the Free Lance-Star in Fredericksburg, Va., in the early to mid-1990s, he has been at the Daily News since April 1986.
Journalism awards:
• Pulitzer Prize for Meritorious Public Service, 1990.
• Society of Professional Journalists: Sigma Delta Chi Award, Bronze Medallion.
• Associated Press Managing Editors’ Public Service Award.
• Investigative Reporters & Editors’ Award.
• North Carolina Press Association, First Place, Public Service Award, 1989.
• North Carolina Press Association, Second Place, Investigative Reporting, 1990.
All those were for the articles he and Betty Gray wrote about the city’s contaminated water system in 1989-1990.
• North Carolina Press Association, First Place, Investigative Reporting, 1991.
• North Carolina Press Association, Third Place, General News Reporting, 2005.
• North Carolina Press Association, Second Place, Lighter Columns, 2006.
Recently learned he will receive another award.
• North Carolina Press Association, First Place, Lighter Columns, 2010.
4. Lectured at or served on seminar panels at journalism schools at UNC-Chapel Hill, University of Maryland, Columbia University, Mary Washington University and Francis Marion University.

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