The purchase earlier this year of a building on Ninth Avenue North, site of the future Chapin Memorial Library and Children’s Museum project, has been the subject of uninformed and unfounded criticism in the last few days. Here are the details, for those interested in the facts.
At one time, the property at 507 Ninth Avenue North was a bakery, but the building sat idle and deteriorated. It was rented through a lease-purchase agreement to the Holly Family LLC, a corporation in good standing since 2010. The agreement gave the LLC an option to purchase the property for $100,000. After entering into the agreement, the lessee fixed up the building and established a business on the ground floor, with a paying tenant on the second floor.
Earlier this year, the Downtown Redevelopment Corporation (DRC) acquired the old bakery building as part of the Superblock purchases for the library and Children’s Museum. By virtue of the lease-purchase agreement with the building owner, the Holly Family LLC had a legal interest in the property. For the DRC to buy the building, that interest had to be satisfied.
Here’s how the transaction occurred. First, the Holly family exercised its option to purchase the property from the current owner, then sold the property to the DRC in a simultaneous closing. To be clear, the Holly Family LLC’s $100,000 lease-purchase option was negotiated at a time when the building was unimproved and in need of repair. The DRC’s purchase price of $325,000 was for the improved building with a usable second floor and two on-going businesses in it.
This was an ordinary real estate transaction, with none of the drama or questions that have been attributed to it. Further, the ratio of purchase price to appraised value for the improved building is within the range of similar purchases in the area.