ES council approves property purchase for hospital renovation

Friday, March 2, 2018

The Eureka Springs Hospital Commission can officially move forward with its plan to renovate the hospital.

On Monday night, the Eureka Springs City Council heard from the commission about an ordinance allowing the hospital to acquire three lots of land adjacent to it. Alderman Terry McClung said he didn’t support the purchase, saying the property isn’t worth the asking price of $141,400.

“The expense of trying to build on it is going to be nearly cost-prohibitive just due to the terrain,” McClung said.

Alderman David Mitchell moved to approve the ordinance on its first reading, and everyone but McClung agreed to do so. Mitchell then moved to approve it on second and third readings by title only, with Mitchell, Melissa Greene, Bob Thomas, Kristi Kendrick and Mickey Schneider voting for it and McClung voting against it.

Schneider moved to invoke the emergency clause to finalize the ordinance in one night, and Kendrick asked for the reason behind the urgency. Mayor Butch Berry said the commission planned to close the sale on Wednesday, Feb. 28, and needed the ordinance to be completely approved before then. Commission chairman Michael Merry agreed, saying the commission will need to finish a survey on the property before its architectural firm can continue working on the project.

“It will be necessary for us to either move forward with this or decide not to,” Merry said.

“But you have it under contract,” Kendrick said. “So you have control of the property. You could proceed with the survey at this time without ownership of the property.”

Commission treasurer Barbara Dicks said the closing date has been set for six weeks. The commission is ready to finalize the sale, Dicks said.

“If we postpone it … it would postpone it for another month or two,” Dicks said. “What is your concern that it’s going so fast?”

“It’s vacant land, it’s currently not being used, you’re not going to use it right away, and so why are we quickly circumventing the normal process which would permit constituents to object to this or for council to change their mind?” Kendrick said.

“It is not a vacant land,” Dicks said. “There is a home on it and a road on it.”

Kendrick asked if the home was occupied, and Dicks said no.

“And what will happen to the home?” Kendrick asked.

“You know that’s later,” Dicks said.

“That’s my point,” Kendrick said. “There are no immediate plans for this. I do not understand the urgency.”

Schneider said the public has been aware of the renovation for a while now, saying no one has objected to the purchase.

“I don’t like using the emergency clause unless we have to, but this being related to land and people, it’s better to just get it done,” Schneider said.

Mitchell agreed.

“I feel strongly that this council should go ahead, even though I don’t like using the emergency clause either, and let’s wrap this up, let them close on this piece of property and let’s just get it done,” Mitchell said.

Dicks said she was concerned the purchase wouldn’t go through if the council decided to wait to finalize the ordinance.

“We had a closing date written up of the 28th, and if we go and say, ‘Sorry,’ well, they can change their mind,” Dicks said.

“I’m a real estate attorney,” Kendrick said. “I understand. You’re in too much of a rush.”

Greene said she understood where Dicks was coming from, and Dicks said there’s too much risk with extending the closing date when it comes to others who might be interested in the property.

“Now that they know we want it, they could certainly go in and overbid us,” Dicks said. “I mean, it’s real estate.”

“We both understand real estate,” Kendrick said.

“It makes no sense to not let them finish the deal based on the date on the contract,” Mitchell said.

Mitchell asked for a vote, and the council unanimously agreed to invoke the emergency clause.

The council moved on to discuss a proposed ordinance for paying down the city’s bond payments, and Kendrick said she was concerned about a section of the proposed ordinance saying the city could use additional funds other than the I&I fee to pay the bonds.

“That really sounds as if all revenues from the water department are going to be applied to the bonds,” Kendrick said. “I think the way it is written is way too broad.”

City attorney Tim Weaver said that section of the proposed ordinance is only meant to provide for unforeseen circumstances in the future.

“There’s always the possibility of funds coming from another source we haven’t yet anticipated,” Weaver said.

Finance director Lonnie Clark said the proposed ordinance doesn’t include a specific amortization schedule because it’s impossible to know how much the I&I fee will generate each year, and Berry agreed.

“The amortization would not completely be accurate,” Berry said. “We’re trying to keep this simple. The ultimate goal was to be sure this was paid off by this date … and tying this to any amortization could possibly present some issues down the road.”

The council took a five-minute break for Clark to consult Weaver. Upon returning, the council deferred the proposed ordinance until its next meeting.

Also at the meeting, the council approved a proposed ordinance regarding the diversion of grant funds on its first reading and agreed to proceed with a project for the city’s storm water drainage repair near Flint Street Fellowship.

The council’s next regular meeting is scheduled for 6 p.m. Monday, March 12, at The Auditorium.

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