Traverse City Record-Eagle


June 24, 2012

Leland courthouse property again for sale

Former courthouse parcels are back on the market

LELAND — It's round two for the sale of the former courthouse property in Leelanau County.

The Leelanau County Brownfield Redevelopment Authority is offering two parcels for sale in Leland at the site of the former county government.

This is the second time the county has attempted to sell the land since the government seat moved to Suttons Bay in 2007.

"The goal really is to get the property back on tax rolls, get it developed and have a residential development there for the community," said Trudy Galla, director of the LCBRA.

The county sold the two-acre-plus site to local developers Varley-Kelly Properties II LLC for $2.4 million in 2007 prior to opening the new county government complex in Suttons Bay Township.

The deal included a land contract with the developers — Robert "Gene" Kelly, a Bingham Township businessman and partner in Varley-Kelly Properties with retired Leland dentist James Varley — and a payment schedule over four years to allow them more time to get the project moving.

Then the recession hit northern Michigan, and the real estate market collapsed. Varley-Kelly fell behind on payments.

"In 2008, the economy changed and things were difficult," Galla said.

The brownfield authority took the case to court, and regained ownership of most of the land. Varley-Kelly retained ownership of two lots and one two-unit townhouse.

The remaining property is back on the market. One parcel of 1.78 acres includes frontage along the Leland River and the historic jail. The brownfield authority is looking for minimum bids of just over $1.4 million.

The minimum bid for a second parcel along Cedar Street, approximately 60 feet-by-250 feet, is $125,000.

The sale numbers are based on recent appraisals, Galla said.

"It wasn't a shock. Everybody knows the values have changed," Galla said.

In February, Gene Kelly told the Leland Township board that he and Jim Varley deliberately defaulted on the land contract, but that they were willing to repurchase the property for the highest appraised value, which they said was $650,000.

Galla said Varley-Kelly's appraisal in February didn't adequately price the land according to comparable property.

Kelly and Varley could not be reached for comment.

Sealed bids are due Sept. 18, and must include a 5 percent deposit. The cash deal must be finalized within 45 days after the bid is accepted.

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