In a recent North Carolina appellate case, the plaintiff appealed after summary judgment was granted for the defendant, the City of Gastonia. The city owned a commercial building within a downtown revitalization district. The building wasn’t used to house a municipal or government office or department.
Starting in 2013, the city leased the building to an art guild, which wasn’t affiliated with the city or the county. The city leased the building in order to fill a vacancy and remove blight from the vacant downtown buildings. The purpose of the lease wasn’t profit, and the city kept its responsibility to inspect the building and maintain its exterior.
The art guild was limited to using the location as an art gallery, studio, and gift shop under the lease terms. The art guild had to provide compensation in the form of 90% of all of the rent money it got from subtenants, 30% of the gross sales receipts received for art sold in that location, and 15% of its gross sales receipts, and the subtenants had to provide at least 15 hours of volunteer time at the gallery as well as performing other tasks.