Former Yelm Telephone/FairPoint Communications Building
Photo credit: Yelm Community Blog
– STORY AT A GLANCE
* The recently approved Fairpoint Building and parcels purchase under scrutiny,
* Yelm’s Blogger presented new information the council did not have when they voted,
* A Special Council Meeting has been called May 29, public invited.
* Bottom line:
Put all of the blame and reasons aside including the profit to the seller, as these are not the issue. The facts are 1. The staff did not present the previous sales price and purchase date to council to compare in making a responsible offer, and the council did not inquire further, 2. the staff/council did not request a qualified commercial real estate negotiator, and 3. the city staff hired no real estate agent to act on their behalf in properly representing their taxpayers’ dollars expenditure. ___________________________________________________________________________________
* Seller made no improvements to the 4 parcels bought for $650,000 in Sept. 2016,
* 20 months later, seller makes a $275,000 profit from city’s $925,000 purchase,
* Seller flipped these parcels within 20 mos. for a 42.3% profit from city taxpayers.
* Council was told a $75K discount off a $1M market-value appraisal was a very good deal,
* Yet who buys commercial real estate based on one appraisal?
* Why was council not informed of previous sale prices/dates of this real estate?
* Why did the city not have an independent real estate agent and/or counsel’s advise?
* Why was this deal rushed where little public process, no open house occurred?
* This agreement’s May 8th Agenda item 8C had no docs, they were misplaced in item 9A.
* Council needs to vote to pause and gather more info to renegotiate this deal,
* Can the city afford public outcry by giving the seller a $100K, $200K, or $275K profit on $650K?
* If not, the city should consider backing-out of this deal for their constituents,
* The city may lose the $25,000 promissory note amount in breaking the deal, which is fair.
* If this building purchase is not now properly vetted, this is a dereliction of duty.
* PUBLIC PROCESS MUST BE INCLUDED IN THIS RENEGOTIATION!
– THE FACTS THAT CAME TO LIGHT FRIDAY, MAY 25TH:
Since Councilors Carmody, Colt and DePinto were the three councilors who “got it” on the points I raised during the public comment period May 22, 2018 about the Fairpoint Building purchase proposal, and subsequently voted “No,” I e-mailed them information I researched.
After I saw the purchase agreement, I noted the following and gathered more information:
A. The four parcels the city agreed to purchase were originally bought by the seller in a “block sale.”
B. A “block sale” means all of the parcels were grouped together in one single sale.
C. DUST, LLC purchased the 4 parcels from Ycom Networks, Inc.
D. Date of the block sale to DUST, LLC from Ycom Networks = 9/19/2016
E. Recording date of the sale with Thurston County = 9/27/2016
F. DUST, LLC purchased the 4 parcels in the block sale for a total of $650,000.
The 4 parcel numbers with Thurston County Assessors information:
– The back-story:
DUST, LLC made a $275,000 gross profit in “flipping” this property to the City of Yelm all within 20 months (their $650,000 purchase price vs. the city’s “discounted” purchase price of $925,000). Whoever negotiated this “deal” was not an effective negotiator for Yelm citizens and obviously knew little about negotiating commercial real estate purchases. I have never heard of negotiating the purchase of commercial real estate only based on what the buyer thinks is a good discount off of a single appraisal.
Let the buyer be ware – the city on behalf of their constituents should always get a second opinion PLUS an independent expert’s counsel. And any comment about the city’s real estate purchase by a councilor who is a real estate agent should be qualified if they had commercial real estate agent experience, and if not, their comments should be barred.
There was no need for Executive Sessions on this real estate purchase because there were no other bidders, buyers or interested parties that would have been influenced by the city’s intended purchase. This was yet another instance where public discourse was subverted via closed Executive Sessions to the public as to info the councilors received and the info that was omitted. The City of Yelm entered in to this purchase agreement on March 30, 2018, with the public first informed on May 3rd via a Yelm Government Facebook page single-page announcement, 35 days after the city made this agreement and 19 days before a final vote. And unless the public was truly adept in finding the purchase agreement documents on the May 8th Council Agenda, they would not find them, for that agenda item 8C was not listed as an action item and had no documents, rather the docs were actually titled for an Agenda item 9A, where there was no business. The city also held no open house and no public hearing, only comments to the agenda item. No wonder the public outcry from a lack of public process. That is not transparency for the city’s constituents!
– Bottom line:
The Special Meeting Agenda for May 29, 6pm, is now posted here.
I recommend the city council vote immediately to put a hold on the purchase of the Fairpoint Building because they need an extension to assess this new information and more after a proper due diligence has occurred, omitted from their May 22nd decision considerations. This time, the public process and transparency are required!
BRAVO to Councilors Carmody, Colt, and DePinto for raising so many issues at the May 22nd council and voting “NO” on this sale, where Councilor Carmody even attempted to extend the sales period to gather more information, which did not occur. BRAVO to these same councilors for calling a Special Meeting to review this information!
THE CITY TOUTS TRANSPARENCY & PUBLIC PROCESS –
HOWEVER ACTIONS SPEAK LOUDER THAN WORDS!