Things were not what they appeared to be when the Spencer’s Inc. property in Mount Airy was auctioned Thursday, with a revelation coming later in the day that the city government was the actual buyer.
The public had left the auction under the impression that downtown businessman Gene Rees was the purchaser of the former industrial land and buildings, which were sold in two parcels (as reported in another article in today’s edition).
But at the beginning of a city council meeting Thursday night, Mayor Deborah Cochran announced that the municipality had bought the biggest share of the property, totaling about 9.5 acres.
It was further disclosed that Rees simply was acting as a “bidding agent” on behalf on the municipality, in order to keep the purchase price as low as possible.
Before Thursday night’s meeting, no mention had been made of any plans by city officials, either to have Rees serve in that role, or spend the money for the purchase. The total cost to taxpayers will be $93,500, including $85,000 (Rees’ high bid for the largest of the two parcels), plus a 10 percent buyer’s premium.
When questioned after the meeting about when those decisions were made, Cochran hesitated and declined to answer, instead deferring to City Manager Barbara Jones and City Attorney Hugh Campbell. Campbell admitted that the decision to allocate the money for the property had occurred behind closed doors, with no acknowledgement of that major expenditure made in any open council session.
“The board did talk about this in closed session,” Jones said of the decision to have Rees act as a proxy. “We thought it was better to get a bidding agent.”
Campbell added that his position is it was legal for city officials to formulate that plan in the way they did.
Earlier in the meeting, some two hours after the mayor announced the local government as the buyer of the property, the attorney had attempted to explain that decision.
“We didn’t want anyone to know the city would be involved in the bidding process,” Campbell said, mentioning that this included a concerted effort by top municipal officials to not attend Thursday’s auction, except for him.
Campbell said city leaders did not want to “alter” the bidding, and picked Rees — a well-known businessman who owns other properties downtown — as their representative.
“He took a bit of a risk as an undisclosed agent of the city,” the attorney said during the meeting in reference to the large sums of money involved. Presumably, Rees is buying the smaller of the two Spencer’s parcels auctioned, for which he submitted the high bid of $18,500, and that portion wasn’t mentioned in the mayor’s opening announcement.
There was also an acknowledgment Thursday night of a direct link between the Spencer’s property and the recent creation of a controversial redevelopment commission, which will serve to allow “local control” of the site’s development, Cochran said.
Plans for that group apparently were set in motion when the auction was announced in February. This coincided with a series of closed meetings held afterward by city officials, for which the attorney-client privilege was cited as a reason for doing so.
“The two go hand in hand,” Commissioner Jon Cawley said during Thursday night’s meeting regarding the Spencer’s property being put up for sale and the redevelopment commission.
“It just seemed like all the pieces fell in place with the redevelopment commission,” Cawley added.
A prepared press release Cochran read from when announcing the purchase also makes reference to the redevelopment commission, which will wield extensive powers in the revamping of blighted commercial areas.
“The city of Mount Airy will work with the redevelopment commission and planning board to help create and manage positive development on this unique site,” the statement says of the Spencer’s site.
It adds, “Our Main Street and downtown is currently thriving and will only become better with mixed-use development in this area (the Spencer’s property).”
The prepared statement further indicates that city officials were compelled to secure the Spencer’s holdings, given the possibility of an out-of-town buyer.
“We will begin working on a plan immediately in order to market this property to potential developers, in an effort to increase economic vitality of this entire area,” it reads. “It will take time for this project to reach its full potential, but local control of the site was the best means to protect these important assets.”
In reading from the page, Cochran also said that “the mayor and board of commissioners recognize the vital role of our central business district, and we anticipate that this acquisition will, over time, promote growth, create jobs, protect property values and will offer new opportunities that will enhance our quality of life.”
Tom Joyce may be reached at 336-719-1924 or on Twitter @Me_Reporter.