Somerset officials, local attorney clash over university real estate deal | News
The dispute between Somerset resident Jay McShurley and Mayor Alan Keck over the possible land contract between the city and the University of Somerset could boil down to one thing: semantics.
At Monday’s city council meeting, McShurley admitted to councilors that it wasn’t the university itself that he objected to. With this formulation, Keck described how the city is reimbursed.
“If that works, it will be wonderful,” said McShurley of the proposed four-year university. “It’ll be great. Perhaps the best that has happened here in a long time. But why can’t you get your money back for a couple of years? I guess I wouldn’t even be here if the mayor hadn’t used a word,” Quite “Because I took that and walked with it. In law that means getting paid back in full.”
The sentence in question was part of Keck’s announcement to the community in April describing the proposed lease.
At the time, Keck said, “What I’ve been saying since the university started is that if the university were located in Cundiff Square, the city of Somerset would be healed. And overall I mean all costs incurred – purchase price, demolition costs, interest expenses, technology used – would be reimbursed. “
McShurley has argued in the last two council meetings – and in a letter to the editor of the Commonwealth Journal – that the city would not get “well” because the city was losing money from a property investment standpoint.
Keck explained that the 30-year lease proposal between the city and the university would result in the university paying back all of the money the city put into the property – the $ 1 million purchase price, the interest on the seven-year-old Borrowed from the city for $ 1 million and the costs the city incurred in demolishing the buildings on it.
This sum amounts to around 1.4 million US dollars.
However, McShurley argues that the city would technically lose money over 30 years because in that 30 year future, $ 1.4 million is worth only $ 800,000 in “current value”.
McShurley opened his comments Monday night by saying that it would be gratifying to hear from other townspeople that he was raising the issue and that they said he was working on behalf of the Somerset people.
“What this means to me is that the council is not doing its job asking these questions that may be a little uncomfortable for the people involved in the proposed lease,” said McShurley.
He also told councilors that if the city has to pay off its seven-year loan before the university repays its full debt under the 30-year lease, then the city will have to make its payments “out of pocket,” such as a general fund.
“The city lacks the opportunity cost to use that money on another project, or to pay off other debts, or to buy back its bonds to pay off debt early,” said McShurley.
But that, according to Keck, is what the municipalities are constantly doing by all means. “We can always pay off future debts. We make decisions about whether to reinvest that money. Whether you leave it in a checking account for a rainy day. This opportunity cost was there long before you started getting involved. “
Keck then admitted that maybe he shouldn’t have used the phrase “made whole”.
“From a purely business point of view, ‘holistic’ was perhaps the wrong terminology. We get what we invest dollar for dollar, ”said Keck.
McShurley then asked if the council was ready to admit that the land contract was essentially a gift to the university.
“Would you like to donate the city’s fortune to the university? Just say yes or no. I think the community wants to know, ”said McShurley.
Councilor Jimmy Eastham replied that this level of negotiation has not yet come about as neither the university nor the council have officially signed or approved the final contract.
“Good. There is hope,” said McShurley.
Still, two council members, John Ricky Minton and Robin Daughetee, defended Mayor Keck and City Attorney John Adams, saying none of them tried to hide information.
Daughetee added, “As for an investment, Somerset City is not a real estate investment company, is it [meant] profit as a real estate investment company. We are a community development organization and that is what this project is all about. “
He said the city would get back the money it spent and it would increase the tax base by turning a run down area into a place that would generate more business taxes and make it a place where others wanted to invest Collect.
“That is the job of this council. That’s the mayor’s job – to improve the city – and I think this project is an improvement of the city, ”Daughetee said.