Somerset officials and local lawyer clash over university property deal | New
The argument between Somerset resident Jay McShurley and Mayor Alan Keck over the potential land deal between the city and Somerset University can come down to one thing: semantics.
At Monday’s city council meeting, McShurley admitted to council members that it was not the university itself he objected to. This was the wording used by Keck to describe how the city would be reimbursed.
“If it works, it will be wonderful,” McShurley said of the proposed four-year college. “It will be great. Maybe the best thing that has happened here in a long time. But for a few years why can’t you get your money back. Guess I wouldn’t even be here if the mayor hadn’t used it. one word: “Together.” Because I took that and ran with it. In law, that means full refund.
The phrase in question was part of Keck’s announcement to the community in April, describing the proposed lease.
At that point, Keck said: “What I have said since the beginning of university is that if the university were to move to Cundiff Square, the city of Somerset would be made whole. And by together, I mean all costs incurred – purchase price, demolition costs, interest charges, any engineering that was spent – 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 will not be “restored” because, from a real estate investment perspective, the city will lose value. money. .
Keck said the 30-year lease proposal between the city and the university would require the university to repay all the money the city has invested in the property – the purchase price of $ 1 million, the interest on the city’s seven-year obligation for that $ 1 million and the cost the city incurred when it demolished the buildings there.
This total is approximately $ 1.4 million.
McShurley argues, however, that over 30 years the city would technically lose money, because in that 30-year future, $ 1.4 million is only worth $ 800,000 in “present value.”
McShurley opened his comments on Monday evening by saying it was gratifying to hear from other residents of the city that he is raising the issue and that they say he stands up for the citizens of Somerset.
“The implication there for me is that the board is not doing its job in asking these questions which can be somewhat uncomfortable for those involved in the proposed lease,” McShurley said.
He went on to tell councilors that if the city has to pay off its seven-year bond before the university repays all of its debt through the 30-year lease, then the city must make its “payments”. another pocket ”, like the General Fund.
“The city is missing the opportunity cost of using that money for another project or to pay off other debt or buy back its bonds to pay off the debt sooner,” McShurley said.
But, Keck replied, this is what municipalities do with all the funds all the time. “We can always pay off future debts. We make the decision to reinvest this money. Whether it’s to leave it in a checking account for a rainy day. This opportunity cost was present long before you started to get involved.
Keck then admitted that maybe he shouldn’t have used the phrase “do everything”.
“Looking at it from a purely business perspective, maybe ‘made together’ wasn’t the right terminology. We get dollar for dollar for what we invest, ”Keck said.
McShurley then asked if the council was prepared to admit that the land deal was essentially a giveaway to the college.
“Do you want to donate the assets of the city to the university? Just say yes or no. I think the community wants to know, ”McShurley said.
Board member Jimmy Eastham replied that it was not yet discussed at this level of negotiation, as neither the university nor the board have formally signed or approved the final contract.
“Good. There is hope,” McShurley said.
Yet two council members, John Ricky Minton and Robin Daughetee, defended Mayor Keck and City Attorney John Adams, saying neither of them attempted to withhold information.
Daughetee added: “With respect to an investment, the City of Somerset is not a real estate investment company, or [meant] profit as a real estate investment company. We’re a community development organization, and that’s what this project is.
He said the city would recoup the money it spent, and increase the tax base by turning a dilapidated area into a place that would generate more business taxes and make it a place for further investment. would like to move in.
“That’s the job of this council. It’s the mayor’s job – to improve the city – and I think this project is an improvement for the city, ”Daughetee said.