By the time city commissioners make a decision on April 21 about whether to buy property at the Imperial Metals site from the Irish Twins Group LLC, developer Jack Buchanan hopes the “inaccuracies” regarding the land, its ownership history and purchase price will be cleared up.
Buchanan told the Business Journal last week he is concerned that not all commissioners are aware of six “facts” surrounding the project that he and his partners in Irish Twins III LLC want to build at 801 Ionia Ave. NW.
First, Buchanan said Irish Twins Group owns the property and not the development firm, Irish Twins III. The Kent County Register of Deeds has Irish Twins Group as the owner.
Second, Buchanan said Irish Twins Group purchased the property in 2005, not in 2002 as was reported at previous commission meetings. County records show Irish Twins Group bought the property from 803 Ionia Ave. LLC Aug. 26, 2005. It was 803 Ionia Ave. that purchased the land from the Imperial Real Estate Investment Co. Sept. 19, 2002.
At the last city commission meeting, board members noted that the property sold for $800,000 in 2002 and for $1.2 million in 2005. But county records also show affidavits were attached to both sales, meaning a purchase price was kept from being made public in both transactions.
“We’ve never said what we’ve paid for it,” said Buchanan. “And we’ve never been asked what we paid for it.”
Third, Buchanan said Irish Twins Group did not sell the property to Irish Twins III in 2005 for more than it paid for the land, as was publicly discussed at a commission meeting. He said that transaction never took place and county records support his claim.
“Why would I sell property I already own to myself at a higher price?” asked Buchanan, who is managing member of both Irish Twins Group and Irish Twins III.
Fourth, Buchanan said Irish Twins Group controls the land and the property isn’t under receivership, as was announced at a commission meeting. He said Wells Fargo Bank did call the note, but then entered into another loan agreement with the LLC. County records show a modified agreement was made between the bank and Irish Twins Group in August 2006.
Fifth, Buchanan said the asking price to the city isn’t too high. He pointed out the city had the land appraised, and the appraised value was $32.80 per square foot. Irish Twins Group has offered the city 48,787 square feet for $1.6 million, or $32.80 per square foot.
Sixth, Buchanan said much of the back taxes on the property have been paid, so the land won’t be in foreclosure. County records show a tax payment of $30,418 was made two weeks ago.
Irish Twins III wants to renovate the former factory into 40,000 square feet of office and retail space. The deal the developers have with the city calls for Parking Services to buy two parcels for two surface parking lots to support the development. But last month, commissioners changed the contract to purchasing only one parcel — the smaller of the two — and the other one when the project’s build-out is completed. The change was made because a few board members expressed a lack of confidence that the project could go forward as proposed because of the dire circumstances surrounding the property.
A new pact would have Parking Services buy about 19,200 square feet at a prorated price of roughly $640,000, or 40 percent of the original sales offer. But Buchanan said his group made a counteroffer that would have Parking Services buy the larger lot for the same square-foot price. Then Irish Twins III would add the other parcel to the development, which means the city wouldn’t have to buy both parcels.
Even though he has made a counter-proposal to the city, Buchanan claims Irish Twins III has a binding agreement with the city for the original offer. He argues that the commission approved the deal’s term sheet Nov. 11, 2008, and then extended the contract’s deadline on Dec. 23.
“They agreed to the agreement. We agreed to that agreement. We continue to meet the terms of that agreement,” he said. “The fact of the matter is, we have an agreement with the city and we continue to honor that agreement.”
But the city has a couple of “out” clauses in the term sheet. The biggest one is: “If the parties are unable to execute the purchase and development agreement by March 31, 2009, then this term sheet will expire and terminate and neither party shall have any obligation to the other hereunder.”
Parking Services Director Pam Ritsema asked commissioners March 24, a week before the deadline, to extend the period for negotiations between her department and Irish Twins III indefinitely. But commissioners balked at doing that and set April 21 as a deadline.