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County will go to court to keep path to hospital sale clear

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By Brian Slattery

Brunswick County officials made plans Monday night to finalize the sale of the old Brunswick Community Hospital property by Feb. 15, 2013.

But to clear the way for a smooth handover, the county filed a declaratory action, a civil compliant in Brunswick County Superior Court, against a former bidder for the property.

County attorney Huey Marshall said the complaint was filed Nov. 2 and served to

Jacobs Real Estate Advisors LLC and Katierich Asset Management LLC on Nov. 13.

“The defendants have until Dec. 13 to file an answer to the complaint or ask for an extension,” Marshall said.

At the Dec. 3 county meeting, Marshall said a response has not been filed.

The declarative action is intended to determine if Brunswick County can keep $78,755 the real estate companies used as a down payment on the hospital before withdrawing their bid.

When Novant built the new medical center, the county hospital’s 32-acre site off U.S. 17 became the county’s responsibility to maintain. 

The county began marketing the property for sale soon after taking ownership in September 2011.

In May 2012, the Crown Management Group LLC made a $1.5 million offer to purchase the property, but state law required the county to sell the property using the upset bid process—allowing another buyer to bid on the property as long as their offer is 5 percent more than the current offer.

In June, Jacobs Real Estate Advisors and Katierich Asset Management made a bid of $1,575,050, “the bare minimum necessary to qualify as an upset bid,” the county complaint states. They also provided 5 percent of the total bid, $78,755, as a deposit.

The county accepted the upset bid, as required by law, in July.

In August, the defendants’ attorney informed the county after a walk-through of the hospital and completion of their initial due diligence, they decided to end their effort to buy the property and asked for a return of their deposit.

In an Aug. 15 letter to the county from Alexander Novak, a lawyer representing the businesses, stated that during a two-hour walk through, the bidders were not shown a basement/crawlspace where water and steam pipes cause such high humidity that it causes a problem resulting in air conditioning and electricity costs of $30,000 per month. They were anticipating costs of $30,000 per year.

The attorney said they want the county to return their down payment because the county failed to show them every part of the hospital.

On Sept. 11, the county proposed an agreement to agencies, but never received a response.

On Sept. 25, the county received a new offer for the hospital, a $1.75 million offer from East Coast Lands One LLC.

After receiving no communications from Jacobs Real Estate Advisors, LLC and Katierich Asset Management, LLC since August, at an Oct. 1 meeting, the county terminated their contract and accepted the new offer.

On Oct. 5, the defendants notified the county they alleged they still had a contract and would file a pending lawsuit to prevent the new buyer from closing until a court determines if they should have their down payment returned.

“(The) defendants have threatened litigation with the purpose of clouding title to the property in an effort to strong arm the county into refunding the bid deposit,” Marshall wrote in the complaint. “The real estate companies’ threat to affect the title led to the county filing the declaratory action now,” county manager Marty Lawing said after Monday’s county meeting.

 

Brian Slattery is a staff writer for The Brunswick Beacon. Reach him at 754-6890 or bslattery@brunswickbeacon.com.