The Three Rivers City Commission continued a contentious discussion over the sale of the former Carnegie Library building Tuesday. Commissioners passed a motion requiring the Carnegie Center for the Arts (CCA) to reach a lease agreement with the Three Rivers Woman’s Club (TRWC) before it will authorize city staff to sign a buy/sell agreement.

Although the city passed a resolution in favor of the sale on July 21, finalization of an actual buy/sell agreement was subject to negotiation of a lease agreement that would continue to allow TRWC to use part of the building as its headquarters. TRWC saved and restored the building in the late 1970s after the Three Rivers Public Library moved from there to West Michigan Avenue, and founded the CCA to make use of it. Since that time, TRWC has leased the building from the city and subleased it to the CCA.

According to CCA Executive Director Donna Grubbs, her organization has “exclusive use” of the building by means of that “pass-through” lease agreement. She said the building now needs extensive repairs to its roof, substructure, walls, windows, and other structural and mechanical systems “in the range of $200,000.” Some parts of the building are unusable, she said. Grubbs said CCA has offered to buy the building for $54,000 so that it can assume liability for the repairs and pay for them directly. City Manager Joe Bippus said the city has no municipal need for the building.

For several months, CCA and TRWC have been at odds over a proposed lease agreement item. Although the two groups agree on most of the terms, TRWC would like to have key access to the building. Currently, TRWC members must either coordinate with Grubbs for access to the building or come during open hours to reach their office and files. CCA has been opposed to granting key access for security and insurance reasons.

Mayor Tom Lowry said it is “unfortunate that the two groups are at odds, so we’re caught in the middle.” Lowry said the CCA board “has not wanted to budge one iota on what (TRWC) is asking for.” He said he doesn’t “see the CCA doing anything to move toward resolution,” and said they CCA board is “playing hardball.” 

Lowry said, “When you’re an arts group, you have to think about your perception in the community,” and with that CCA’s refusal to address the key issue “without any consideration for (TRWC) that saved the building and created the CCA” and its “total disregard” for TRWC and “demand to acquiesce,” he will only support moving forward on the purchase “when the Woman’s Club has said yes.”

TRWC Attorney Steven Glista said while he does think the CCA’s concern with regard to insurance is legitimate, he doesn’t believe it should prevent key access for the Woman’s Club. Lowry said it would be worthwhile to consider insurance concerns if CCA could get provide information on how granting key access to TRWC would impact its coverage policies. Commissioner Clayton Lyczynski II said as an insurance agent, he doubted key access “will change the price much if at all, but it would be reasonable to have the information in two weeks” when the commission meets again.

Commissioner Daryl Griffith said the parties are “all in agreement except for keys.” He said the CCA was “being obstructive” with its arrangement for allowing access to the building. CCA and TRWC could work out lease language that would clarify when and how CCA would grant TRWC access to the building, but such language “could be extensive,” so simply granting a key “could simplify that.”

Griffith suggested rather than making TRWC negotiate with CCA as a third party, the commission “could be negotiating directly and saying, ‘here’s how it’s going to be.’” Earlier, he said, “I thought we made it clear we expected the key to be included in the lease. I think the key is necessary, and this impasse really illustrates that. With the city as lessor, (TRWC) had an amenable landlord. If they are going to butt heads now, I can understand exactly why they want a key.”

City Approves Purchase of Tax Delinquent Properties

Commissioners approved a resolution to purchase five seized, tax delinquent properties, some on multiple lots, from St. Joseph County for a total cost of $59,256.04, plus recording fees and mowing costs incurred up to the date of sale. Municipalities have a right of first refusal on such properties within city or village limits before they go to auction. 

The purchase costs include “past due taxes and fees associated with each parcel,” as well as current year taxes, according to documents provided at Tuesday’s meeting by city staff. Funds for the purchase come from the city’s general fund balance. According to the resolution, the city “plans to sell these properties to qualified buyers pursuant to a development agreement requiring each property to be rehabilitated” according to an agreement reached prior to issuance of a deed to the buyer.

Two of the properties, 1401 Fifth Street and 303 North Erie Avenue, have structures on them. The remainder are undeveloped lots. Bippus said two of those were ideal for “infill development,” including a property on South Lincoln Street and one on Second Avenue. He said those properties could have prefabricated houses constructed on them, or be built up by developers.

A property parcel consisting of several lots within the Meadows condominium complex would have to be resold as a single parcel, must have a condominium built in accordance with the complex’s existing designs, and once developed, must be resold according to the condominium association’s terms. Bippus said there is interest in that property from developers.

Commissioner Chris Abel said he saw “value in purchasing standing properties and turning them over” to the city’s housing authority but did not see value in purchasing empty lots at a time when building materials are rising. Abel said, “I just fear these are going to sit off of the tax rolls for a very long time. I have doubts whether anyone is going to build on these or not.”

Finance Director Cathy Lawson said the City issued a special assessment bond for the Meadows Condominiums in 2013. She said there is still about five years of debt service remaining on the lots included in Tuesday’s purchase. The city would be responsible for assuming that debt service while the property is under its ownership. The special assessment amount on the lots in question is about $6,600 per year, which would be passed on to a developer if one were to take the property on.

Bippus said Tom Meyer purchased the land with intent to develop them, but in the last several years has “not been able to find a way to build and make a profit.” Meyer stopped paying the taxes, Bippus said, and the county seized the land. Bippus said, “we could let it go to tax sale. Someone may buy it, and if not, we’ll end up with it anyway.” 

Lowry said without purchase of the Meadows parcel, “we lose the opportunity to direct its future.” Commissioner Pat Dane said she was confident the property would be developed and sold, and Griffith said letting the property go to auction would mean giving up “control over the potential buyer.” 

Abel proposed an amended resolution excluding the Meadows lots from the purchase. Abel said the money spent on a parcel that could sit empty was a “large downside” to the proposed purchase, but with his vote being the only one in favor, his amended resolution failed to pass. Griffith said he thought the full purchase was “the wiser way to go at this point,” and Lowry agreed. Abel cast the sole “nay” vote against the original resolution supporting the full proposed purchase.

Dark Store Resolution Passes

During his closing comments, Bippus raised a proposed resolution supporting a stance by the city of Escanaba opposing a potential new appointee, Victoria Enyart, to the Michigan Tax Tribunal. Escanaba is located in the western Upper Peninsula, and previously attempted to sue the Tribunal over the issue of “dark store” taxation. 

Over the past two years, attorneys for the owners of “big box” chain retailers successfully argued because there stores eventually become obsolete and unsellable at market value at that point, their assessed value should reflect the value of an unusable building. Other supporters of the assessment approach say it discourages municipalities from depending on big box retail as an economic development or revenue earning strategy.

However, Lowry said because big box store buildings a can no longer be assessed at construction or market value, Three Rivers has lost over $300,000 in revenue. Three Rivers contributed $5,000 toward Escanaba’s legal costs in fighting the Tribunal’s interpretation. Bippus read aloud the proposed resolution in support of Escanaba’s ongoing fight at Tuesday night’s commission meeting. Commissioners subsequently voted to adopt the resolution.

City Attorney J. Patrick O’Malley thanked commissioners for passing the resolution. He said, “we do have a couple of dark store appeals to the commission this year. It might be appropriate to bring those up at the next meeting so you are aware of these cases.” O’Malley said he will provide additional information about these cases and the dark stores issue at that time.

In Other City Commission Business:

• Commissioners approved the purchase of seven Axon Fleet 2 Systems, which include communications hardware for the Three Rivers Police Department. Originally, $57,435 was allocated in the current fiscal year budget, based on a quote issued prior to the COVID-19 pandemic. The supplier since reported rising costs due to the pandemic. The approved, new cost of $64,953 is a $7,518 increase over the previously budgeted figure.
• Lyczynski said he supported permitting trick-or-treating for this year’s Halloween. He said, “I believe as a city we should but that on our citizens to be responsible.” Bippus said he has a statement prepared on the matter setting hours but leaving decisions about how to participate up to individuals.
• Lyczynski also requested an update at each meeting on the status of the city’s high-risk, high-hazard dams. High-hazard dams are those that would threaten loss of life in the event of a failure, regardless of current condition. High-risk dams are those whose condition presents a threat of possible failure. The dams at Wood Street and Hoffman Pond are both high-hazard, and reports after the failure of a dam near Midland last spring suggested the Hoffman Pond dam may also be at an unknown risk of failure due to incomplete inspection information from its owner.
• Dane said that soccer games took place at the Armstrong Youth Sports Complex last weekend for the first time this year, and that a car show is scheduled for next Sunday. “If you haven’t seen (the complex), this weekend would be a good weekend to come and look,” she said.

Dave Vago is a writer and columnist for Watershed Voice. A Philadelphia native with roots in Three Rivers, Vago is a planning consultant to history and community development organizations and is the former Executive Director of the Three Rivers DDA/Main Street program.