Source: Sherman Publications

$400K sale price, $10 option offered for village property

by CJ Carnacchio

June 04, 2014

Ten dollars can buy a decent meal or a good cigar, but when it comes to real estate deals, it’s a relatively a tiny sum.

Just ask the Oxford Village Council.

Last week, council discussed an option agreement it received from Venture, Inc., which is considering purchasing the village-owned property at 98 S. Glaspie St. in order to construct an apartment complex for senior citizens (age 55 and older) who are deaf or hard-of-hearing.

Venture, Inc., which is a subsidiary of the Oakland Livingston Human Service Agency (OLHSA), offered the village $400,000 for the 3.5-acre site.

A recent appraisal commissioned by the village put the site’s value at $305,000.

Venture, Inc. wants an exclusive option on the property through Dec. 31, 2015.

Village attorney Bob Davis explained to council that under such an agreement, Oxford would not be allowed to negotiate with anyone else interested in the property while the option was pending. “This would be a binding agreement,” he said.

In return for granting it the exclusive rights to purchase the site, Venture, Inc. offered the village the sum of $10.

In the proposed agreement, Venture also reserved the right to extend its exclusive option for an additional six months beyond Dec. 31, 2015 for an additional $10.

Davis expressed concern about the proposed option.

“I know the purchase price might be attractive, but I’m not sure it’s that attractive,” he said. “It’s awfully aggressive to ask to tie up your land for $20 for two years.”

And there’s no guarantee that Venture/OLHSA would be able to proceed with the project because the funding for it is entirely dependent upon applying for and receiving low-income housing tax credits from the Michigan State Housing Development Authority.

Davis believes “there’s got to be some wiggle room” in the option agreement.

“I just don’t want to see your hands tied,” he told council.

Davis suggested the agreement could be amended to include a caveat that if the village receives a purchase offer greater than $400,000, it’s free to pursue it.

“That may turn them off, but it’s not unheard of to just make it a nonexclusive option,” he said.

Village President Dave Bailey was not impressed by Venture’s $10 offer. He felt it “reflects on the mindset of the people that we will be dealing with.”

“What can they be thinking of?” said Bailey, noting if Venture had offered $100, he “might take them seriously.”

“I wouldn’t view it as an insult,” said Davis, but he admitted to being a “little concerned” when he saw the small amount.

“I thought I wasn’t seeing it right,” the attorney said. “I thought it was $10,000.”

Ultimately, Davis advised council to not let the proposed option kill the potential deal.

“It’s actually a nice project,” he said. “It’s actually a use I think you would welcome at that site.”

Davis is going to review the proposed agreement and return to council with some suggestions at the Tuesday, June 10 village meeting.

Councilman Elgin Nichols was pleased the purchase offers for 98 S. Glaspie St. are at least “moving in the right direction.”

The village previously received two other offers for the property – $250,000 from Raven Engineering, Inc. and $305,000 from Puritan Magnetics, Inc.

Raven has since withdrawn its offer.