By MELINDA J. OVERSTREET
for Glasgow News 1
The deal is done.
The transaction in which the City of Glasgow purchased almost 162 acres at 1573 Cleveland Ave. for nearly $6.15 million closed just after 1 p.m. Tuesday, a day after a majority of the city’s legislative body approved the second reading of a budget amendment moving funds from one city account to another for the accurate reflection of the source of the expenditure.
Mayor Henry Royse told GN1 that everything went according to plan with the closing, with no problems arising.
Next up comes an open-house style gathering Dec. 3 at which three tentative options for how to best develop the property with one cohesive plan rather than piecemealing bits of it are to be presented to the public.
Who, when, how?
Royse and Councilman Terry Bunnell, in an interview with Glasgow News 1, discussed a few more details about how they learned the real estate was available, why it was attractive from the perspective of city government and, generally, the intended uses for it.
At the time the council voted Sept. 9 to pursue the purchase, the property had been under contract by MCS Properties LLC for purchase from the Leonard and Bernadene Johnson Living Trust.
Royse told GN1 that a principal of MCS had contacted him, as mayor, directly on Aug. 8 to ask whether the city would have any interest in the land.
“We certainly would have had interest in that.”
Since the idea took off, he said, it has come to his attention that city officials at various times over the years had approached the prior property owners, the Johnsons, about whether they would be willing to sell the land.
“That property has been discussed a lot by several different entities,” Bunnell said, but none were able to acquire it. “And then when Mrs. Johnson died, then the heirs decided then to market the property.”
Bernadene Johnson died in April of this year, and she was predeceased by her husband.
Royse had previously told GN1 that he was told by MCS that the heirs had wanted to sell all the property owned by the trust together at one time and did not want to split it, and that property included land along U.S. 31-E, and it was really only that parcel that MCS wanted, so that’s why that company wanted to sell the larger tract off Cleveland Avenue.
Royse said that after his call with the MCS representative, he contacted the chairman of the council’s finance committee, who is Bunnell, “at which point we agreed we needed to talk about this some more, not so much in the finance committee, but we have a tremendous amount of personnel who are nonvoting, not members of a committee, no quorum required, no open meetings required.”
He said those individuals included the city treasurer, the city engineer, the planning director and the tax administrator.
“We sat down; we talked about it,” he said, referring to the group of staff members, sans Bunnell. “We didn’t do anything other than bring it to the finance committee to discuss what had been discovered by looking at it and what the next move ought to be.”
That led to a closed session for the discussion of a potential real estate transaction during the Aug. 20 meeting of that committee, after which no action was taken in open session, and it was announced that none was taken in closed session.
Royse said that at that point, the information available to the committee members included the price, the location, how they would begin with due diligence, confirmation the funds were available, the fact the property is all within the city limits but at least some rezoning would be necessary and the tax base potential.
The full council then had closed sessions, citing the same real-estate-related exception of the Kentucky Open Meetings Act, at its Aug. 26 and Sept. 9 meetings, the latter of which was when the vote was taken afterward in open session, with two opposing it.
GN1 asked what needed to happen between those two full council meetings to get the point of being ready for a vote. Bunnell said that when considering a property purchase, there’s a lot of conversation that needs to happen to see what is needed to make it work, what kind of due diligence is needed and who should, what requirements the city has to further the approval process, and what the price is and whether they can come to an understanding with the seller, because then that information has to be presented.
“And there are certain covenants we have to have from the seller,” Royse said, “for us to see that it is purchasable. In other words, we just can’t go on ….”
For example, the seller has to have a clear title to the property for it to be transferable. In this case, MCS completed its purchase of the entire amount of property the trust was selling, and then the city purchased it from MCS. The city also has to have access to the property to do its surveying and such.
“So we kept in constant contact with the seller,” Bunnell said, “moving it along.”
He said there was no change in the price through that process, but part of the negotiation was that the seller paid for part of the due diligence work. Due diligence included a title search, geotechnical surveying and testing, property-line surveying, determining setback requirements, water flow patterns, topographical mapping showing gradient and elevation changes, for example. The mayor said they didn’t find any sinkholes, and as far as he knows, no cemeteries were found. A blueway was found, he added, so that will be factored into development plans.
“We’re excited about the ability to acquire the property,” Bunnell said, but they couldn’t make a public announcement until it was certain the city could get it and still wanted to get it.
Why?
Royse said the city, “for a long time, has realized we need, badly, to grow,” and he sees this as the city government’s making an investment in the future of the community.
He said the money for the purchase is coming from revenue generated at the Glasgow Regional Landfill.
“Somebody’s got to reach out and get our residential, our commercial, our recreational, other parts of the …, to make it attractive when we are trying to recruit industry and trying to recruit retail, and the city’s in the best position,” he said.
“We look at this development,” Bunnell said, “as the three R’s; you’re looking at residential, retail and recreation.”
The mayor said it would be more difficult for a private developer to do such a large project, because they would have to be making payments on a loan and the interest on it while they’re still doing preliminary work.
“The city can buy the land and hold onto it until they get it developed and then they pay us for it,” Royse said. “It’s just the way to make it happen. It’s happened in every city around here. We’re fortunate that we have the money to – what’s the word I’m looking for, Terry, inspire growth?”
“We’re serving as a catalyst with this property,” Bunnell said. “It’s an opportunity for us to acquire the property, to do all the due diligence on the property, to get it in a position where a developer would show interest in it; therefore, we have been the catalyst to move it forward for development purposes.”
He said those purposes would be along the lines of residential, retail and recreation development.
Bunnell said it’s a dynamic location, well-situated within a lot of amenities the city offers, and it has proximity to schools, shopping, medical services and roads.
Royse and Bunnell noted separately but briefly that the state plans to widen that portion of Cleveland Avenue, also identified as Ky. 1297, over the next few years. “So that adds value to it,” Bunnell said.
He said the property has another access point through Sorenson Avenue, too, and some road frontage along Grandview Drive.
“Infrastructure and utilities are there,” Royse added, “on all four sides.”
Bunnell reiterated the mayor’s viewpoint that this is an investment for the sake of the city.
“We made a commitment to have one tract of land that’s going to have multiple usage, that would generate economic value, that has …. We hope to have [a] good revenue base. We hope to have good aesthetics for the community, for it to look well. We think that’s a good growth area for the city of Glasgow, is the west side of Glasgow,” he said, noting the plan for road widening, good schools nearby, housing in the area, access to Donnelley Drive, which connects to U.S. 68-Ky. 80 and the county’s park facility as the reason for that.
Royse said they know that some of the people who look at the community think Glasgow doesn’t have the right kind of housing to attract their midlevel management, and part of this development could improve that perception.
Bunnell further expanded on what made that specific property attractive. He said that, from a strategic planning standpoint, thinking about what the city could look like five, 10 or 20 years from now, the location – because it’s a single tract and all within the city limits already – affords the city a lot of opportunities to improve the property with different amenities.
“So the strategy is, to keep developing the city, we felt the city – through our ability to acquire it, to ability to help develop it, we felt through our staff’s knowledge of planning and zoning, all the way through, from our public works and the combination of people that have added value to this already – we’re the ones that need to do this. We need to control the development that occurs there,” Bunnell said. “This development will be a hallmark for us, and we want it to be a hallmark and to be a bellwether for us, so that when we look at other developments that will occur in the future in the city of Glasgow, we can come back to the Johnson property and say, ‘This was planned well. It was developed in a way that had the best usage of the property,’ and use that as a springboard to go to other sites in the community to develop, and allow us to continue to add value to our city.”
Royse said a byproduct of the due diligence is that when a developer comes to look at doing something there, the city has already done the geotechnical survey and searched for any sinkholes, cemeteries and whatever else may have arisen.
This is the last piece of vacant property within the city limits of this magnitude as well, Bunnell said.
Royse said he didn’t even think there were any vacant tracts of 100 acres left.
Bunnell said the state legislature has created some laws that make it more difficult for cities to annex property if it impacts the county’s ability to grow.
Royse added that a separate purchase the city had made just prior to this one along Veterans Outer Loop – 19 acres that had belonged to Farmers Rural Electric Cooperative Corp. – was the last open piece of land along the loop that was in the city limits.
As an example, the mayor mentioned a purchase the City of Bowling Green made quite a few years back off Lovers Lane that is now developed and contains a park and fire station.
“The illustration is that cities that grow have some skin in the game. They don’t sit around and wait for somebody else to do it,” Royse said.
Bunnell, expounding on the “three R’s,” said that years ago, when the city developed a strategic plan, that included a housing study for the county commissioned by the Barren County Economic Authority, and it showed a lack of housing inventory. He said Glasgow has a lot of retail, but there are continual opportunities to improve that footprint and have Glasgow become a shopping destination.
“We are fortunate we have several parks in our community,” Bunnell said but most of them are in the central and eastern portions of the city. Beaver Creek Park along Beaver Trail is in the northern part of town.
“We have nothing basically, going in that direction,” he said, motioning westward. “And we feel that the access is good there.”
The county has a park in the west part of town, and the city-county soccer complex is there, but he sees potential for recreational development for the city as well.
“So, when you look at those three components: residential, so that is a housing need you’re helping fulfill [and] you also get the ad valorem tax to that, so that’s a plus,” Bunnell said. “Talk about retail – we talk about net profits tax. You talk about people working there in that, so there’s an occupational license fee from that. Recreation – that’s a, to me, an amenity that your citizens are looking for, but it’s also, that’s a good revenue for the city.”
He said when people come to an event or activity at a park from out of town, they often also have a meal or shop here.
“All of these three, they complement one another,” Bunnell said.
The multiplier effect with parks and out-of-town visitors also applies with housing and retail – people who live in an area are going to shop or go out to eat there and go to activities there, he said.
“And then recreation is just a quality of life that adds value to our community,” he said.
Bunnell said that all of those three things are areas where the city needs to improve, so they are “the highest and best usage,” and location lends itself to all three.
Royse said this property has close access to Veterans Outer Loop and the Louie B. Nunn Cumberland Parkway, and Bunnell said it’s also close to the U.S. 31-E Bypass.
“The city has to be in a position to be a catalyst; that’s all we’re doing,” the mayor said. “We don’t want to be in the development business. Period.”
What next?
The engineering firm QK4 was selected to perform the due diligence work, which was completed Nov. 8, and, based on those findings, its staff is translating that information into three potential options for the general layout of overall development there – “the way it could be,” as Royse put it, or as Bunnell put it, how the three R’s could be arranged.
Royse said these ideas wouldn’t be so specific that it boxes in developers as to exactly how everything should be; there will still be room for individual touches, so to speak.
Those options will be displayed at the event from 6 to 8 p.m. Dec. 3 in Council Chambers on Floor 2 of Glasgow City Hall. Notice has been provided that it could be considered a special-called council meeting because a quorum of the council members could be there.
The mayor first announced this event at the Nov. 12 full council meeting.
He told GN1 that the intent is for some of the QK4 personnel as well as the key city staff members familiar with the project to be on hand to answer questions one-on-one.
“We also are going to provide some little forms, if somebody wants to write something down and put it in the box,” Royse said, essentially a suggestion/feedback opportunity.
He said there may be some introductory remarks, but the event is meant to be relatively informal. The mayor said he hopes to get a lot of feedback from developers as well before any final decisions are made as to which option to pursue.
After that event, the mayor said the city would then begin to solidify what is needed to open the property to development.
“We obviously want to generate a list of requirements, restrictions, such as minimum square foot size of a house and the setback lines of the houses and materials driveways can be made out of,” Royse said.
Bunnell said the types of streetlights to be used would be another example of a restriction placed on the property.
“We want this to be the best in Glasgow,” he said.
Royse said the city officials will need to understand how much developers need to get done to be able to plan for what they want to do, e.g. how many streets and how they connect.
Bunnell said some of the very most basic infrastructure work may be done by the city to get the land prepared to be the most attractive it can be to developers who would want to buy and build on it.
“This is an investment. It’s a critical part of our community. We think there’s growth opportunity there, with the number of housing [units] that can go there, with the retail that can go there and the recreation to go there …, this is a neighborhood,” he said.
To be clear, the intended commercial use would not be industrial in nature, the two men said.
“We’re in pretty good shape, for the moment, on that,” Royse said.
For the recreation component, some portion of the land would remain as city property for some yet-to-be-determined type of facility or facilities, Bunnell confirmed.
Bunnell said the city government makes investments in the community of all kinds, whether it be fire trucks or other equipment, and this one happens to be with real estate to make good usage of the land to serve a variety of needs.
“Cities do this every day. They buy property every day,” he said.
“They just built a new Hilton in Paducah on city property,” Royse added.
Bunnell concluded by saying that this is not a novel idea; Glasgow is not the first city to make such an investment, and it won’t be the last.
“I’m committed with the mayor and staff to make this work and to be the best it can be, and that is what we want for Glasgow,” he said. “We want to raise everything up. That’s everybody, raised at the same time.”
Royse, who is wrapping up his second year as mayor in a four-year term, said he appreciated the good financial management of administrations long before his that allowed them to make this purchase, “but we now are not being smart if we don’t use some of the things that we’ve let build up to actually – we need help.”
