The city of Huber Heights spent $20,000 of taxpayer money in March in an attempt to buy land, but according to one council member, the city did not use the normal procedure for doing so.
Huber Heights City Manager Rob Schommer called the $20,000 earnest money put toward buying land. The city felt it was necessary to show its interest in purchasing the property by putting down that money, Schommer said.
“It’s not money that was spent and then forgotten about,” Schommer said. “Although this wasn’t a physical purchase of property, this was an investment on a long-term thing.”
Huber Heights City Councilman Ed Lyons said the way this was done was not best practices.
“I find myself asking why we did it this way,” Lyons said.
The city ultimately decided not to move forward with the purchase because land adjacent to the property was not available and an interested developer ultimately pulled out, Schommer said.
“It didn’t make sense to just purchase one piece of the puzzle,” Schommer said.
The city of Huber Heights considered buying parts of the Marian Shopping Center on Brandt Pike for $2.8 million, according to documents obtained by the Dayton Daily News through a public records request.
Schommer said taxpayers are in favor of developing the Brandt Pike corridor, so spending that money was in their interest.
According to the documents obtained, the city paid a third party the earnest money and for economic development consultations. That third party then wrote a check for $20,000 to the owner of the shopping center, Zeus Shopping Center Inc.
Lyons said paying a third party is not best practices because there is no proof that the check ever reached the land owner.
“I’m not saying (the $20,000) was stolen or misappropriated,” Lyons said. “I am just saying there is no proof.”
The city paid a third party to deal with the property owner to keep the city’s bargaining power, Schommer said.
When a seller knows the buyer is the city, that seller typically doesn’t give the city the best deal, thinking the city has a large budget, Schommer said.
The city does not typically put down earnest money when negotiating a land purchase, Schommer said.
He said the city didn’t need to put down earnest money when it purchased 52 acres of land near the Rose Music Center, Schommer said. The city purchased the acreage on the corner of Executive Boulevard and Brandt Pike for $3.75 million at the end of August.
There was no appraisal done on the Brandt Pike property. Schommer said that is typical because the city decided not to go forward with the purchase. There is also no developer agreement for a similar reason. The city “hadn’t gotten that far” with a developer, Schommer said.
And while the city didn’t end up buying the property in March, Schommer said it is likely the city could return to negotiating about the property.
Schommer called spending the $20,000 a “calculated risk.”
Huber Heights has taken several other calculated risks that have paid off, Schommer said.
The Carriage Trails subdivision, the Rose Music Center and the Kroger Aquatic Center were all risks that have been very successful, he said.
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