MEMBERS PRESENT: Mayor David L. Rowe, Commissioners Jim Armbrister, Shirley Brinkley, Dean Brown, and Jon Cawley

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1 MOUNT AIRY, NORTH CAROLINA REGULAR MEETING MINUTES September 21, 2017 MEMBERS PRESENT: Mayor David L. Rowe, Commissioners Jim Armbrister, Shirley Brinkley, Dean Brown, and Jon Cawley MEMBER ABSENT: Commissioner Steve Yokeley APPROVAL OF AGENDA: On motion by Commissioner Brinkley, seconded by Commissioner Brown and passed unanimously, the agenda was approved. CONSENT AGENDA: On motion by Commissioner Brown, seconded by Commissioner Brinkley and passed unanimously, the following items were approved by way of consent agenda: APPROVAL OF AUGUST 22, 2017 SPECIAL CALLED MEETING MINUTES; SEPTEMBER 7, 2017 REGULAR MEETING MINUTES: RESOLUTION # MAKING LIBRARY BOARD APPOINTMENT: RESOLUTION MAKING LIBRARY BOARD APPOINTMENT RESOLUTION NUMBER WHEREAS, Mr. Cooper Adams appointment to the Library Board expired in June, 2017 and he elected not to seek reappointment; and WHEREAS, it is recommended that Ms. Hattie Brintle be appointed to the Library Board for a three-year term: NOW, THEREFORE BE IT RESOLVED BY THE CITY OF MOUNT AIRY BOARD OF COMMISSIONERS MEETING IN OPEN SESSION THAT: Section 1. Section 2. Hattie Brintle is hereby appointed to the Library Board for a three-year term, which shall expire June 30, This resolution shall become effective upon approval. Approved and adopted this the 21 st day of September, RESOLUTION # MAKING ABC BOARD REAPPOINTMENT: RESOLUTION NUMBER

2 RESOLUTION MAKING ABC BOARD REAPPOINTMENT WHEREAS, Dr. Hugh Sutphin s appointment to the ABC Board expires October 31, 2017; and WHEREAS, Dr. Sutphin has expressed interest in being reappointed to the ABC Board: NOW, THEREFORE BE IT RESOLVED BY THE CITY OF MOUNT AIRY BOARD OF COMMISSIONERS MEETING IN OPEN SESSION THAT: Section 1. Section 2. Dr. Hugh Sutphin is hereby reappointed to the ABC Board for a three-year term, which shall expire October 31, This resolution shall become effective upon approval. Approved and adopted this the 21 st day of September, RESOLUTION # MAKING RECYCLING ADVISORY COMMITTEE REAPPOINTMENTS: RESOLUTION NUMBER RESOLUTION MAKING RECYCLING ADVISORY COMMITTEE REAPPOINTMENTS WHEREAS, both Cindy Wilson and Tracy Greenwood s appointments to the Recycling Advisory Committee expire October 31, 2017 and both ladies are eligible for reappointment; and WHEREAS Ms. Wilson and Ms. Greenwood have expressed interest in being reappointed for another three-year term: NOW, THEREFORE BE IT RESOLVED BY THE BOARD OF COMMISSIONERS MEETING IN OPEN SESSION THAT: Section 1. Section 2. Section 3. Cindy Wilson is hereby reappointed to the Recycling Advisory Committee for a three-year term, which will expire October 31, Tracy Greenwood is hereby reappointed to the Recycling Advisory Committee for a three-year term, which will expire October 31, This resolution shall become effective upon approval. Approved and adopted this the 21 st day of September, 2017.

3 RESOLUTION # MAKING HOUSING AUTHORITY APPOINTMENT: RESOLUTION NUMBER CERTIFICATE OF APPOINTMENT OF COMMISSIONER OF THE HOUSING AUTHORITY OF THE TOWN OF MOUNT AIRY, NORTH CAROLINA WHEREAS, the Housing Authority of the Town of Mount Airy has heretofore been duly organized pursuant to the North Carolina Housing Authorities Law, as amended; and WHEREAS, the term of Bertie S. George as a Commissioner will expire February 16, 2020 and due to her resignation on August 4, 2017 there is a vacancy: NOW, THEREFORE, pursuant to the North Carolina Housing Authorities Law, as amended, by virtue of my office as Mayor, I hereby appoint Jerry McMickle to serve as Commissioner for the remaining term ending February, 16, IN WITNESS WHEREOF, I have hereunto signed my name as Mayor of the Town of Mount Airy, and caused the official seal of the Town of Mount Airy to be affixed hereto this the 21 st day of September, (end of consent agenda) PUBLIC FORUM: Mayor Rowe: It is time for the public forum. This is an opportunity for anyone in the audience to address the board. Please come up to the podium, state your name, address, and whether or not you reside in the city limits. After the public forum is closed, all items on the agenda will be for board discussion only the audience will not be recognized for comments. I now declare the public forum open and first, I want to recognize Brandon Hawks. Brandon Hawks, Surry County Inspections Department Director: Thank you for allowing me to approach you tonight. For the record, I am Brandon Hawks, Surry County s Inspections Director and I want to approach tonight to discuss an ongoing situation that we have been having at the Mayberry Mall. In April, we deemed the building to be unsafe due to unmaintained roof conditions, which have caused leaks, rust, and decay and that has caused other problems throughout the building with ceiling tiles, water and electrical components, and there are mold issues. We have identified those conditions and in your packet, I started with several general statutes relating to our process. I would like to take some time to go through this packet to show you where we are at with the situation and what our future options will be. To begin with, 160A-425 covers defects in buildings to be corrected. This is the time back in April when we notified the building owner of the unsafe conditions of the building and gave him direction to remedy in an immediate fashion. Statute 160A-426-unsafe buildings condemned in localities, that is again back in April when we did indeed deem the building to be unsafe and posted a notice. Statute 160A-428-action in event of failure to take corrective action, we notified the owner of the conditions and told him that the building was

4 deemed to be unsafe, constitutes a fire and safety hazard, is dangerous to life, health, and other property, it is likely to contribute to blight, disease, vagrancy, and danger to children, and has a tendency to attract persons intent on criminal activities. All of these are important but our main focus is fire and safety hazards. We also informed that we would have a hearing within ten days of that notice and if you look further in your packet, you will see the general statutes, a copy of the unsafe building notice dated August the 10 th informing Mr. Michael Kohan, the mall owner notification of the conditions, that a hearing would be held and he would be given the opportunity to explain his case and after this, may issue an order according to Statute 160A-429 the order to take corrective action. That order was issued and further in your packet is a letter dated September 8 th, 2017 and that was received by Mr. Kohan on that date via from attorney Ed Woltz. We gave him directive the order was to repair the roof, to replace and remedy the interior components that were damaged due to the water and mold, and we are also directing him to establish monies into an escrow account to be held in trust through Ed Woltz s office. That escrow account would be used to disburse funds to fix the roof at the discretion of the Inspections Department upon completed portions of the work. In the order it says if you have met that condition you have 120 days to complete that work and to make the necessary repairs. We gave him two weeks to place the monies into the escrow account. We also notified him that he had the opportunity to appeal to this board and my office and he had ten days to do so. That deadline was Monday, so Mr. Kohan failed to appeal and therefore, the order is final. We come to where we stand at this moment 160A-430, the appeal period has passed and 160A- 431 is failure to comply with the order. Tomorrow, Friday, September 22 nd is the deadline of the two week period to establish the monies in the escrow account. If he fails to do so by tomorrow at the end of business, he will then be guilty of a class I misdemeanor for violating the order. At which time, I will work in coordination with Attorney Campbell and we will need to go before the magistrate to file papers for being guilty for violating the order and then if you will turn over to 160A-432, which is the enforcement and it states whenever any violation is denominated a misdemeanor under the provisions of this part, the city, either in addition to or in lieu of other remedies, may initiate any appropriate action or proceedings to prevent, restrain, correct, or abate the violation or to prevent the occupancy of the building or structure involved. Also, under section b, which is my hope that we don t get to this point, is removal of the building. It is those options that I want to present to you tonight and I open the forum to any questions but before I do, I do have a couple of other items in the packet. Behind my letters, you have an estimate from Clever Construction who is a roofing contractor and has given an estimate for the total roof replacement. This was sent to the owner on Monday this week and you will also see the very last piece is an internet story from The Daily Gazette about the mall s owner. It spells out an eerily similar picture to what we are dealing with right now. This gentleman has demonstrated the same behavior in multiple states and buildings. So, I just wanted to share that with you and will take any questions you may have. Commissioner Cawley: Mr. Hawks, I have one. You keep saying the building are we talking about just Kmart, or are you talking about everything that is not Belk s? Brandon Hawks, Surry County Inspections Department Director: Everything that isn t Belk.

5 Commissioner Cawley: So all of that has already been condemned? Brandon Hawks, Surry County Inspections Department Director: It has been deemed unsafe, yes sir. Commissioner Cawley: Thank you. Commissioner Armbrister: Mr. Hawks, I noticed a lot of this focus that seems to be around the roof is the replacement of the roof sufficient or the structure that will hold the roof what is the integrity of that? Brandon Hawks, Surry County Inspections Department Director: For the most part, the structural post beams all appear to be safe there is some question that we would have to explore as the roof panels are removed a section at a time to verify if the joists have significant rust as this may compromise the stability or the structural stability of the reattachment of the panels. The new roof panels will be fastened with screws but if we have significant rust, we will have to address that through further investigation by a structural engineer. Commissioner Brown: You said that there are other places that he had pulled the same trick Brandon Hawks, Surry County Inspections Department Director: It is my understanding that the gentleman owns 22 malls throughout several different states. Commissioner Brown: How were the problems solved there? Brandon Hawks, Surry County Inspections Department Director: In this story, I believe it went through the courts and I think it was actually demolished. Others are closed and have been vacated. Commissioner Brown: At no time, did he do the repairs? Brandon Hawks, Surry County Inspections Department Director: In these stories, no. Mayor Rowe: Twenty-two? Brandon Hawks, Surry County Inspections Department Director: I believe that is the number, yes sir. Commissioner Brinkley: So, is he classified as a criminal because he is not following the laws that are set up or is someone just not called his hand and put him in jail or? Brandon Hawks, Surry County Inspections Department Director: If he is guilty of a misdemeanor, then I would say yes.

6 Commissioner Brinkley: It sounds like he is. Brandon Hawks, Surry County Inspections Department Director: He will be tomorrow if he doesn t put the monies in the escrow account. Commissioner Brinkley: You are not holding your breath. Brandon Hawks, Surry County Inspections Department Director: I am not. I had a conversation with him last night and he flat out told me that he didn t have a million dollars to put into an escrow account and my conversation with him last night he feels like he is in the midst of a negotiation and I told him matter of fact that the negotiation is done. You have received the order and have had the opportunity to make the repairs. You did not and I highly recommend you put the monies in the escrow by Friday. Commissioner Brinkley: How long has he been owning these malls and letting them go. Brandon Hawks, Surry County Inspections Department Director: I don t know the duration of how long. Commissioner Brinkley: Did you tell him to sell some boats and condos? I am just being real facetious. We are all angry. Brandon Hawks, Surry County Inspections Department Director: I understand. I have said all along I said at the hearing we had on the 21 st of August to many of the mall tenants, many of them are with us tonight, that the biggest thing that hurts me is the unfortunate action that I have to take as a codes enforcement official doesn t reach the one who is at fault. They are the ones that are paying for it because they are the ones who will be in the position of their jobs and their livelihood to be compromised and their safety has been a big compromise for the last six months or longer. Yes, I am very upset as a code enforcement official I take my job very seriously. Commissioner Brinkley: Is there a possibility that this could be a scam that continues going across state lines and could become federal because of the damage that is being done to many people throughout each state? Brandon Hawks, Surry County Inspections Department Director: I am going to let Attorney Hugh Campbell handle that question. I don t have the answer to that. Hugh Campbell: I don t know the answer-it is a class I misdemeanor, which is a fairly minor charge. The individual we are speaking of is not actually the owner of the mall the mall was acquired by a limited liability company called Mayberry Mall Loyalty Management in The likelihood is there are different limited liability companies all across the southeast that own these malls as single purpose LLC s so placing them all together would be difficult to make it any kind of federal case.

7 Commissioner Armbrister: I know there is going to be quite a bit more discussion on this. I know of course a priority is looking at what the future could be there to be something positive. The overwhelming question we have now is to try to there is not going to be a good answer to this there is going to be a best answer, but none of them are going to be good that I can see right now. We want to preserve we got a lot of people that we may take a part in preserving their livelihood and their businesses and for whatever options we have, I hope that one of those maybe we could progress toward making that happen. I know that our hands are limited on what we can do. The focus throughout is to salvage what we can for our local people that are there and proceed on with as much of the mall as we can without affecting them and I know that there are lot of standards there that I am not aware of. I know my goal during this is to preserve the jobs as best we can for as long as we can. Brandon Hawks, Surry County Inspections Department Director: And that has been our focus for the last six months. If this would have been a standalone building with one owner, one tenant, and our enforcement was just the violator, it would have been condemned six months ago. We have done a lot of bending and turning and a lot of try this and try that in order to try to save those jobs. Commissioner Armbrister: Yes you have. Thank you. Mayor Rowe: Is the escrow account controlled by your attorney? Brandon Hawks, Surry County Inspections Department Director: Ed Woltz. Commissioner Cawley: So, as I have understood it, the Kmart building seems almost to be beyond repair in some people s opinion. The other part of that building that is not owned by Belk is also unsafe. Is there a dollar figure that has been put to the cost of repairing those small units? Brandon Hawks, Surry County Inspections Department Director: The overall estimate that we received from Clever Construction was a lump sum excuse me it was a per square price so if we go back into the document, at the last page of his estimate, he has estimated 172,740 square feet being a total of 1,727.4 square at an estimated cost of $ per square. So I am sure if we could do the math and remove 72,000 square footage of Kmart, you have 100,000 square feet of remaining mall that needs to be addressed, we could break that apart and come up with a dollar figure. Commissioner Cawley: Ok so if we break that apart for a separate dollar figure, since it is not as bad as there are no gaping holes that we know of, would that cost come down? Brandon Hawks, Surry County Inspections Department Director: That s probably unlikely. As far as the percentage rate per square foot, I don t think so because what you are going to encounter is as you remove the roof covering, you are going to uncover more rust. You will have more holes that have been created just like we are seeing in Kmart. Plus, it is more than just the rust and leaks that are now the focal point of the problem. As Fire Marshall Fallaw and I have discussed, we have so many ceiling tiles that have been water damaged and

8 removed that we have some concern that the sprinkler system wouldn t actually activate as it is designed because now, the heat is going to move beyond the drop ceiling because all of the ceiling tiles have fallen out. So, we have got more pressing concerns about the protection of the building in its current condition beyond Kmart. Commissioner Brinkley: You can fix it but you still have conditions because of mold has built up in these walls. Brandon Hawks, Surry County Inspections Department Director: There is a side contract that was agreed to with Abatemaster back in August when we had the hearing. They went in and cleaned some of the debris out in the Kmart region, but they are on hold until the roof is fixed because it really does no good for them to go in and remove and clean and then have more rain and more leaks, so they are on hold until the roof is fixed. Commissioner Brinkley: And who is paying them? Brandon Hawks, Surry County Inspections Department Director: Mr. Kohan has paid half of that contract and I believe our total is $48,000 for that contract in whole. Commissioner Brinkley: Does he promise to pay the rest in a certain amount of time? Brandon Hawks, Surry County Inspections Department Director: He promises Commissioner Brinkley: I know I know. But I mean he has made a commitment at some point. Is there anything in writing from him? Brandon Hawks, Surry County Inspections Department Director: I have a copy of that contract that I can share. Commissioner Brinkley: How long is his contract? Brandon Hawks, Surry County Inspections Department Director: Valid? Meaning how good is his word? Commissioner Brinkley: Yes. That is about it obviously not good at all. Brandon Hawks, Surry County Inspections Department Director: He paid half up front so they did get the payment enough to come out and do a partial removal. Commissioner Brinkley: Did you ask the owner at any point in time, because I was not at the meeting, why he allowed it to get to this point? Brandon Hawks, Surry County Inspections Department Director: I did not directly ask that question. Commissioner Brinkley: It would be nice to know.

9 Brandon Hawks, Surry County Inspections Department Director: I think it was asked during that meeting when was the last time you actually visited the mall and I don t think he had a response. I don t think he has been there in the last year maybe two years. Commissioner Armbrister: Is there a point depending on what is determined of possible actions that there s a possibility that a new owner-someone that was looking to purchase the mall and take over those issues and correct them-at what point would they be able to begin those negotiations with someone else other than the owner. Brandon Hawks, Surry County Inspections Department Director: That is a question that I hope to discuss further with the attorney. As we get to a point where the city may have abated the problem and filed a lien against the property and then a possibility of failing to pay that lien would lead to taking the property. Those are details that the attorneys will be able to assist us with as far as that process. Commissioner Brinkley: Does he flat out own this property or does he have mortgages on this property? Brandon Hawks, Surry County Inspections Department Director: I don t know that information. Attorney, do you happen to have that information? Hugh Campbell: There are no mortgages but my understanding is there are a couple of judgement liens from contractors who have done work and not been paid nominal amounts, but there is no bank loan against the property. Commissioner Cawley: At what point when you fail to live up to a contract does that become more than a class I misdemeanor? Is there a dollar amount? Hugh Campbell: Unless there is fraud or some other criminal intent there, it is just a civil action and wouldn t rise to the level of being a criminal act. This is a special statute for the failure to comply with an order from the building inspector will be guilty of a misdemeanor. Commissioner Cawley: Am I understanding correctly for us to claim control of the property, we would have to pay for fixing the property? Hugh Campbell: Abating the nuisance would give the city a direct route to then enforce that lien. That is correct. Mayor Rowe: How long is the process? Hugh Campbell: It depends on the court system and how much resistance we would have from the owner. Mayor Rowe: So tomorrow, assuming he fails to pay the amount, that is a point at which the order is final and the three things you say we decide on becomes our decision to make.

10 Brandon Hawks, Surry County Inspections Department Director: The decision is made ultimately in the inspections department but I want to work with you for the best interest of citizens. Commissioner Armbrister: Correct me if I am wrong, but if on a day to day basis, if something occurs regardless of what the plans are, we can force closure of the mall depending on what happens. In other words, that could happen any day? Brandon Hawks, Surry County Inspections Department Director: We go back to the enforcement statute I presented to you-in the first paragraph, whenever any violation is denominated a misdemeanor under the provisions of this part, the city, either in addition to or in lieu of other remedies, may initiate any appropriate actions. I, then in turn act as an employee of the city through a contract with the county so the decision is yours. Commissioner Cawley: How many employees are we talking about? Brandon Hawks, Surry County Inspections Department Director: I believe there are 17 tenants and I placed an average of five employees per tenant give or take. If we look at being able to salvage Belk and possibly Hallmark, you are looking at 15 tenants so maybe 75 between 75 and 100. Commissioner Cawley: Is the Belk building in jeopardy? Brandon Hawks, Surry County Inspections Department Director: Belk is a standalone building but we will have to do some remodel to create a new wall of separation between themselves and the mall and Fire Marshall Fallaw and I will work together to look at the sprinkler system and fire system to be sure that everything is separated and can still function for their end. Commissioner Brinkley: What happens to these people they have probably already ordered their Christmas items for sale because that has to be ordered months in advance. What is happening to these tenants and their I mean they re in limbo right now not knowing what to do. Brandon Hawks, Surry County Inspections Department Director: My first thought is to restrict access to customers to keep the public safe, allow the tenants a certain duration to be in the building to liquidate and relocate inventory. Mayor Rowe: How risky do you think keeping the portion open that is still open now-how risky is it? Brandon Hawks, Surry County Inspections Department Director: I think it is very risky. We did some temporary patching before the owner came through but it was only temporary. I still feel we are encountering more leaks and run the risk of further water into the electrical components in the ceiling and run the risk of having more ceiling tiles out as was discussed

11 earlier jeopardizing the sprinkler system s ability to discharge. I don t feel it has been safe for months but really haven t gotten to the severity of the Kmart part yet. Mayor Rowe: The statute you read that said the city employees you through a subcontract with the county, does that not make us have fiduciary responsibility? Hugh Campbell: Yes sir, the city will act if the codes enforcement inspector brings this to the city, the city then has an obligation to take appropriate action under the statute. Mayor Rowe: And what does fiduciary mean? Hugh Campbell: Fiduciary means the highest duty of responsibility-that is not in the statute but I understand where you are headed. There is a duty for the city to respond and take appropriate action. Mayor Rowe: So if something happened, we would be responsible. Hugh Campbell: I don t know what the law would be on that-i don t want to go that far but I think there is a duty for the city to respond when these cases are brought forward. Commissioner Brinkley: So any lawsuits that are brought at this point could fall on the city? Hugh Campbell: I wouldn t go that far and I think the property owner is responsible for upkeep and maintenance. Commissioner Brinkley: But there is more involved here than upkeep and maintenance-that is a huge part. I am seeing a different side here and why this man cannot be charged with something besides a misdemeanor, which is very small, because there is health issues. This is a physical problem for the people going in working there and shopping and there should be greater laws that could be charged against this man than what we are seeing here. Is there anything else that could be pulling him into court? Hugh Campbell: I would say maybe. I would say it is more along the line of civil liability should someone get sick or hurt or property damage, then the victim in those situations would certainly have the right to sue against the property owner and responsible party as well. Commissioner Brinkley: I mean this man is just going to walk away and smile and look what he has left behind. He needs to pay. Brandon Hawks, Surry County Inspections Department Director: Let me also add please that there is a liability on the enforcement staff. We have, as one of our duties, to enforce the code and if we fail that, then I, as a codes enforcement official as well as the department, could be liable for failure to perform our duties. We have a duty to respond and respond quickly.

12 Commissioner Brinkley: And that is what you re trying to do. Brandon Hawks, Surry County Inspections Department Director: Yes ma am. Speaker from the floor: Inaudible. Brandon Hawks, Surry County Inspections Department Director: I am sorry, I can t hear you. Could you repeat that sir, I couldn t hear you. Speaker from the floor: Inaudible. We own the building right beside of where you go into Kmart on the right. Inaudible. I was up there this evening. There is a pipe busted and the water was still going down the side. Brandon Hawks, Surry County Inspections Department Director: In the mall sir? Speaker from the floor: Yes. Brandon Hawks, Surry County Inspections Department Director: Which space? Maurices I believe is next to the Kmart. The outside of the store? The one that is on the outside of the mall-the Republican Headquarters? Speaker from the floor: Inaudible. Mayor Rowe: So even if we decided that we would step in and abate the problem, I guess is what you would call it, fix the roof, file a lien, and he pays off the lien, then he has a brand new building back. What is right about that? Commissioner Brinkley: He may not be safe in town if he came back. Commissioner Cawley: What is right about that is there is still opportunity for employment. Brandon Hawks, Surry County Inspections Department Director: At the end of the day, we are looking at compliance from our office. We are looking for compliance and a safe building so if he does that, then I am satisfied as a code enforcement official. Speaker from the floor: Inaudible. Mayor Rowe: Any further questions for Mr. Hawks? Commissioner Cawley: Mr. Hawks, I have heard something about 120 days Brandon Hawks, Surry County Inspections Department Director: Yes, sir. Commissioner Cawley: Would you explain that if it is pertinent?

13 Brandon Hawks, Surry County Inspections Department Director: That number was given based on discussion about the time table and the size of his crew and what he felt he would need given the season and also given the amount of work that would have to be done. Again, that was working trying to get to a resolution. The statute requires that we give at least 60 days unless we had an imminent life hazard so I felt compelled to negotiate with him to give him 120 days and allow him that length of time to complete the job. Commissioner Cawley: So that would put us past the first of the year? Brandon Hawks, Surry County Inspections Department Director: At this point, yes. Commissioner Cawley: Is there work that is having to be done during that 120 days to allow 120 days to be given? Brandon Hawks, Surry County Inspections Department Director: Absolutely. He has to show progress, otherwise, he doesn t get paid. Commissioner Cawley: If that work is being done, are those stores allowed to remain in operation? Brandon Hawks, Surry County Inspections Department Director: That was the initial objective, yes sir. Commissioner Cawley: That is what I thought. Brandon Hawks, Surry County Inspections Department Director: We would have to arrange some type of staging-the contract would remove this person s roof, his objective is to remove and put that section of the roof back and have it sealed in a day but there could be dust and debris, so there may some coordination with the tenants to make sure they aren t in harm s way during that time. Commissioner Cawley: Thank you for all your energy into this. Brandon Hawks, Surry County Inspections Department Director: You re welcome. Anything else? Mayor Rowe: I hope the tenants out there know we are in a difficult place. There is nothing we can do that is going to be what any of us would like it to be. Brandon Hawks, Surry County Inspections Department Director: Before I leave, Mr. Tim Cox just arrived. Mr. Tim Cox is with Clever Construction and he is the roofing contractor that we have been in discussions with for the last month or so. He has been very helpful and very affirmative with a knowledge of roofing. His is the quote that you have in your packet. I requested he attend the meeting as well tonight just to answer any questions from a technical standpoint on the roof.

14 Mayor Rowe: Mr. Cox, what is a pitch pocket? Tim Cox, Clever Construction: The pitch pocket is to secure around places like where the air conditioning or electrical supplies go through the roof. Commissioner Brinkley: How many laborers are you going to have working at one time knowing we are in such a pinch here? Tim Cox, Clever Construction: The roof is in bad shape and that concerns me. I had one of my workers who weighs around 130 pounds and he put his foot through the roofing and I just don t want a lot of people up there at once. I think safety is more appropriate and there are just too many hazards for too many men. I am thinking maybe somewhere around six to seven guys up there is plenty including myself because there is a lot going on up there and I just don t want to jeopardize the safety of workers. I just really don t want anyone hurt. Mayor Rowe: Tell me about your contractors license. Tim Cox, Clever Construction: Inaudible. They are on the licensing board for general contractors. Commissioner Cawley: Mr. Cox, is it your opinion that all of the roof is equally bad? Tim Cox, Clever Construction: Ninety percent, yes. Belk s is I have walked on their roof and very happy with it. About every bit of JCPenney s roof was improperly installed. It isn t hurricane proof-it is almost like a tent has formed from shrinkage. Inaudible. One of the biggest issues that is going on right now is the EPDM and there is a lot of water trapped. The existing roof right now that is in the hallways and going to Belk s is rotten. We have to be very careful how we step. There is various roofs up there-you got built up, you got EPDM s, and more and whenever you start laying new roofs over built up, you are going to be trapping water in there. The drop ceilings where water has come through is rusted out. This is where we have to be cautious of where to step. I had scoped out there is probably a section in front of the maintenance area I don t know about the decking under that because I did not view this particular section and it may be a 70 by 70 area that is probably about the most stable part. Mayor Rowe: What are you going to go back with? Tim Cox, Clever Construction: Well we will go back with a 22-guage decking and a tec #5 screw that will penetrate where we are fastening it down and applying a 2.6 ISO insulation board and will attach a ½ inch fiber board on top of that. Everything will be tied down to hurricane specs and that is 16 plates and screws per board overtop a four by eight section and every edge of roofing, parapet wall, roof risers, everything is secured by RMS stripping and installed with a gator plate every twelve inches. What that does is prevents the wind to be able to go under the roof and pick it up. Mayor Rowe: How long you been doing this?

15 Tim Cox, Clever Construction: Since Commissioner Brinkley: Have you seen other malls in this bad of shape that you have worked on or have you worked on other malls? Tim Cox, Clever Construction: I don t guess one this large in this capacity. We have done some repairs in Greensboro on malls in that area and some strip malls which does not need they usually tend to these before it gets this bad. One thing that we do not like to see is water trapped because this is the end result. Once you trap water and start rusting the decking out you really don t have much left. Commissioner Cawley: Mr. Cox, are you going to work from the roof down or the ground up? Tim Cox, Clever Construction: I will be on the roof. We have to be on top of the roof. Mayor Rowe: What about the joists that you have seen, are they all right? Tim Cox, Clever Construction: From what I have seen, yes I think the joists will probably be ok because I haven t seen any accumulation of rust or anything like that. That is something that will concern me very much because until we get further into this, we are not going to know the answer to that because I have only seen the exposed certain parts of the area but what I did see was ok. Commissioner Brinkley: So your estimate could really climb. Tim Cox, Clever Construction: I wouldn t think so. I don t foresee that really. Mayor Rowe: Do you see any way to accomplish this by staging in certain areas so we can keep tenants in the building? Tim Cox, Clever Construction: I will tell you what, I know the 120 day extension but realistically, to do that staging, we will need more time. These people inside the mall, this is a big concern for us and that is one reason why I even put myself on that roof was for people s safety. I still continue coming back and I tell you my whole concentration was focused on the tenants. I didn t want them to get water coming in on them. You have danger of that, danger of collapse, too many hazards going on that need to be tended to. Mayor Rowe: Now, Brandon, your order not only includes the roof but the interior as well, right? Brandon Hawks, Surry County Inspections Department Director: Yes sir. Mayor Rowe: And he is just talking about the roof Brandon Hawks, Surry County Inspections Department Director: Correct.

16 Mayor Rowe: Any more questions from anybody? Well I guess we will anxiously await tomorrow. Brandon Hawks, Surry County Inspections Department Director: Yes sir. Thank you for allowing me to speak. Mayor Rowe: All right, this is still a public forum. Lisa Ring, Hallmark Store owner (non-city resident): My name is Lisa Ring and I own the Hallmark Store in the mall. I am not a city resident I live right on the outskirts but I do own the business there and I have owned it for ten years. A lot of what Brandon had talked about, him and I talked about in the past whenever he would come in the store but through this whole thing, we had been led to believe in the mall or I had, I don t know how many people had, that the mall is going to be fixed and going to be worked on and that there is no way they could close the whole mall only the end where Kmart was where they condemned it. Now this is what I had been told by the manager, who is Chad. I don t know what he is telling other people but when we all get together, we all heard different stories. I wasn t concerned because I thought, well my roof s not leaking. It leaked a couple of Christmas s ago and I withheld rent for three months until he fixed my roof. He probably spent $1,000 on my roof because they didn t have to do much but in turn, he got three or four months back rent from me that I hadn t paid him so he came out pretty good because I do pay a substantial amount of rent because I pay a common area maintenance every month of around $1,000 on top of my rent. So anyway, I thought well, this can t affect me and I don t think it should affect me. There is a lot more than five employees per store Brandon gave a number. I have eight and I need two more but you got to find them so I would be eleven in my one store and I know that other stores about my same size. You had brought up the fact that yes we are getting in Christmas. I have $100,000 more dollars that I have to pay for sitting in my store today than I had 30 days ago. I can t not take that merchandise because if I am there for Christmas, I have to have it to sell. Christmas is what makes us be in business all year. You know, I know everyone thinks and a lot of my customers say well where are you going to move, you just have to relocate. There is no relocating for me-i am 4,500 square feet and I need every ounce of that space to have a good variety so people do not have to go to Winston or Greensboro or anywhere else shopping. I do have one of the larger Hallmarks and I bring people in from I don t do great business because that s the economy you know a lot of people shopping online, but I do bring a lot of customers in from Winston and Greensboro and even West Virginia that cannot that does not have a Hallmark store in their town any longer and I am the closest. It does bring revenue to the town and to the restaurants and gas stations and anywhere else they might go while they are there. So I am asking that you do everything you can to not close the mall. I know that there is a lot of roof damage I am willing to take my own rent and fix my own roof whatever needs to be done if that is the case. I haven t paid rent since I found out for sure that I could possibly close and I have no intentions of paying him another penny because like I said before, to get him to do anything for me, I had to make him I had to withhold rent. I am willing to do what it takes to keep my store open. It was added on later when Belk s was so the roof probably is newer than the rest of it but there is a lot of people that work in the mall that depend on that

17 job and I am one of them. I don t have a spouse to help out with my house payment and a lot of the other people is the same way. A lot of the other people are single, they got kids in college and they need that job. We are not just going to walk out of there and be able to relocate tomorrow or even in 30 or 60 days. Even if we actually had the money or someone to build the place for us, that isn t going to happen overnight. People can say just tear the mall down I don t know how many times I have heard that it will cost millions and millions not a million and a half or two million it would probably be $15 million to rebuild that mall. That isn t going to happen because everyone has said in other towns that the mall everybody is going away from the mall and shopping in strip malls or independent well that is true but that is not the case in Mount Airy. Everyone wants to spend their money re-beautifying downtown and the side streets and things like that but the mall is just as important because I am sure the mall brings in more revenue than Main Street or Market Street or any of those other streets do. So I just want to ask that y all do everything in your power to keep the mall open and I don t know what else to say. I just appreciate the time that it took for y all to listen to me and I also appreciate your business because everybody in the mall needs it. Thank you. Mark Rogers, Rogers Realty: Good evening Mayor Rowe and Commissioners and folks in the audience tonight. I am Mark Rogers with Rogers Realty here in Mount Airy. Thank you all for your service. I can see this is quite a major thing of discussion and issue and concern. I will keep it brief. In February of this year, a real estate executive with a major retailer reached out to me through a friend in Charlotte who said I need help in Mount Airy, North Carolina identifying the owner of the Kmart space and they had been unsuccessful. Basically the guy said can you help me and we were able to identify the mall owner and reach out to them in February and expressed interest in a client that I have who is a potential buyer. So let s make one thing clear the client of ours is a potential buyer and not the mall owner today. It is a complex transaction just as it is complex for you all to determine what to do and I appreciate Mr. Hawks comments and obviously I have walked through and in fact, because of this transaction, on most days when it rained I went up to the mall because I needed to see it, so there is a lot of concern there. I really believe that this client is the solution and I can t promise that I am just stating as Mr. Campbell will tell you, a deal is not a deal until the money comes through and tomorrow is the deadline for money. My point is simply that since February, we have been in discussion with a potential buyer. It has been a challenge but there has been a verbal agreement reached and there is a contract drafted that outlines the verbal agreement. This client was first interested in the Kmart side only, however this client is open to purchase the remainder of the mall of course excluding Belk, which is its own entity. I think there is some good news, the timelines are concern, but I think there is some good news that if this transaction could be put together, the mall can be salvaged or obviously renovated. Yesterday s USA Today listed twenty retailers in 2017 alone that filed bankruptcy so when you say it is another retailer, some will say Mount Airy is a wonderful city but it is a small city and we are not going to get a big box retailer. I would have said that is a fact until this negotiation began in February. They are a Mount Airy values type company and their revenues are over $1 billion per year and here is why I am confident they can make this happen-this company does not have any debt. They are privately held, so it will be more difficult to check out their financials but they gave me permission today to tell you because I told them that I would probably come tonight that

18 they generate about $1.3 billion in 2016 and I think next year is $1.6 billion with zero debt. They use their capital and write their own checks. So maybe there is a silver lining. I am here to say just that so folks will know. I have read the articles and understand the concern and I understand that you all are really backed up against a wall so I am asking for cooperation and permission perhaps really to visit with you all and let me tell you, the city commissioners and attorney, the name of the company and where we are in negotiations and see how we might partner together for a potential sale to a party that would bring a grand store, which would be not an anchor tenant, but an anchor owner. This company is very interested in the success of the small shops and so some of those are represented here today. It can be a win-win I don t think there are any short-term solutions but I just wanted to make that point and say it in a public forum. We are willing to work with you all and perhaps introduce the company and maybe let you even speak to one of their leaders and see where we can take this for a better resolution and hopefully a new vibrant Mayberry Mall. Mayor Rowe: How far apart are you in negotiations? Mark Rogers, Rogers Realty: Mayor Rowe, we agreed on price months ago but again, just like our codes office had been negotiating for further repairs, it s really interesting because our negotiations include roof repair, mold abatement, removal of the tile floors, and basically having the structure safe, dry, with a new roof prior to closing. So you can see how we have some challenges but I also think I have some alternative options with this buyer that may get us there in a shorter time frame and those are things I think would be appropriate if we could maybe visit sometime if appropriate so I can share with you some alternative solutions for the repairs. Brandon Hawks, Surry County Inspections Department Director: My question is why hasn t the seller not acted with a sense of emergency if there was a prospected sale? Mark Rogers, Rogers Realty: That is a good question. I really can t answer you because I have removed myself from contact with the owner and in working through a partner that is a representative of the retailer for negotiations. They talked today my representation talked with Mr. Kohan today so I mean it is an ongoing discussion. Brandon Hawks, Surry County Inspections Department Director: Is there a serious desire to sell the building? Mark Rogers, Rogers Realty: I believe so because I believe that is his solution a solution and I think that is the best solution for our community. Mayor Rowe: Thank you. Anyone else wish to address the board? All right, seeing that there is no one else, the public forum is now closed. Mayor Rowe declared the public forum closed.

19 REMARKS BY OFFICIALS: Commissioner Brinkley: Getting excited and scared. This is huge undertaking. Praying they make the best decisions for everyone. Commissioner Armbrister: No comments. Commissioner Brown: Thinks this will be a good thing. Commissioner Cawley: No comments. Barbara Jones: No comments. Hugh Campbell: No comments. Mayor Rowe: Just in the nick of time comes to his mind. CLOSED SESSION: On motion by Commissioner Brinkley, seconded by Commissioner Armbrister and passed unanimously, the board entered into closed session: a) Pursuant to NCGS (a)(3) Attorney-Client Privilege b) Pursuant to NCGS (a)(4) to Discuss Matters Relating to Economic Development OPEN SESSION: On motion by Commissioner Brinkley, seconded by Commissioner Brown and passed unanimously, the board entered back into open session. ADJOURNMENT: On motion by Commissioner Brinkley, seconded by Commissioner Brown and passed unanimously, the meeting was adjourned. Approved and adopted this the 5 th day of October, ATTEST: David L. Rowe, Mayor Melissa N. Brame, City Clerk