The fate of the Blue Building is back under review. McMinnville officials are considering an agreement with McMinnville Heritage Preservation, but cannot agree to some conditions.
City attorney Tim Pirtle was asked by city board members to review a proposed agreement with the organization regarding the property.
Pirtle says four items in the agreement cannot be done.
“First, the proposed agreement granted an exclusive right to the preservation group to market and list the property for sale or lease on terms and conditions that the preservation group deemed appropriate,” said Pirtle.
However, Pirtle says McMinnville cannot delegate its legal right and responsibility for disposition of an asset owned by the taxpayers to a third party.
“If the preservation group identified an interested purchaser or lessee of the property, then the board might lawfully consider the terms and conditions proposed for the sale or lease of the property, but it simply cannot legally delegate its responsibilities related to the sale or lease of its property to third parties.”
Second, McMinnville Heritage Preservation is not a realtor. Pirtle says the city cannot designate the organization as its agent.
“The preservation group is not a licensed realtor or real estate broker to our knowledge,” said Pirtle. “Accordingly, it cannot be designated as an agent for the city to sell the property.”
Being a non-exclusive marketer is possible.
“It is entirely appropriate to engage the preservation group as a non-exclusive marketer of the property, but the city cannot engage the preservation group as its agent for the sale of the property,” said Pirtle.
Third, the proposed agreement gives the group the option to purchase the property at an unspecified price.
“The board cannot sell or contract to sell the property to the preservation group or any other interested purchaser without compliance with applicable law regarding competitive bidding or eliciting competitive proposals for purchasing,” said Pirtle.
Finally, the proposed agreement authorizes the group to expend any sums it deems appropriate for repair, rehabilitation or marketing. It does not obligate the city to directly reimburse the preservation group, but it effectively retains a lien for such expenditures against the proceeds of any sale or lease of the property.
“The provision violates the process required of the board for spending taxpayer money,” said Pirtle. “The preservation group might, also, be authorized to submit any application for expenditures on the repair, maintenance or marketing of the property to the board for its consideration and approval in conformity with applicable law.”
The information was submitted to McMinnville officials during Tuesday night’s regular session. No decision was made regarding an agreement.