Traverse City Record-Eagle

October 1, 2013

Leelanau strikes deal on courthouse property

BY GLENN PUIT gpuit@record-eagle.com
Traverse City Record-Eagle

---- — LELAND — Leelanau County taxpayers are scheduled to shell out $587,000 to resolve a dispute over a piece of land that, just six years ago, was expected to boost county tax coffers by $2.4 million.

County Administrator Chet Janik confirmed the county expects to take possession of the old courthouse property in Leland from developers Varley-Kelly Properties II LLC for $587,000, resolving a long-running legal dispute over the two-acre-plus site.

“It’s a lot of money, but … this allows the county to move forward, assuming the deal closes,” Janik said.

The legal negotiation closes a painful chapter in the county’s brownfield redevelopment program. In 2007, the county sold the old courthouse site to Varley-Kelly for $2.4 million prior to the county opening its Leelanau County government complex in Suttons Bay Township.

The developer had big plans for the old courthouse property, including the construction of residential town homes. The developer put only $100,000 down for the piece of land and the county agreed enter into a land contract with the developer.

When the real estate crash hit, the developer fell behind on payments and the development faltered. Then came years of disputes and disagreements about who owned what, along with at least two failed attempts by the county to sell the property.

Janik said a buy-and-sell agreement negotiated with the developer requires Varley-Kelly to remove a string of liens on the property. That act will allow the county to return the property to the market without concerns over title and ownership.

“It’s reliant on them removing the liens on all the property before closing,” Janik said.

Janik said he’s optimistic county taxpayers eventually will get back what they’re paying for the land; he said other developers have expressed interest in the property.

The project previously received a $1.2 million loan from the Michigan Department of Environmental Quality to pay for site cleanup and demolition. About $600,000 of the loan was used to clear the property.

Jonathan R. Moothart is an attorney representing Varley-Kelly. He declined comment for this story.

A 13-page buy-and-sell agreement reached between the county and developer states closing on the deal is expected to take place within 30 days.

Tom Van Pelt, chairman of the Leelanau County Board of Commissioners, did not return phone calls seeking comment on this story.

Commissioner Will Bunek, in a prior interview with the Record-Eagle, called the proposed agreement a “win-win” for county residents because it will allow the county to resolve the matter once and for all and put the property back up for sale.

Leland Township Supervisor Cal Little said the township is not involved in the transaction, but he said the community is optimistic better days are ahead.

“I would hope that the original intention to develop that property would be realized -- that being a residential development that would keep with the township’s ambient environment,” Little said. “It would be an asset.”

Similar sentiments were echoed by Linda Linquist–Bishop, president of the Leland Chamber of Commerce, who noted it’s “time to move forward” on the property.