Athens has tentative deal to buy land from development

Lawer for University Estates denies project is in default, vows to fight sale

The city of Athens has negotiated a $1.75 million memorandum of understanding for the possible purchase of more than 600 acres of the University Estates development off Ohio Rt. 682 and Armitage Road.

City Council President Bill Bias has been in negotiations with Silar Advisors LP, a New York-based firm that holds the mortgage note on the UE project. Silar has reportedly claimed the project is in default.

"The city of Athens was approached by Silar, who was basically in receipt of a mortgage that they claimed was in default on University Estates," Bias said. "The mortgage was for, I believe, about $6.3 million. They asked the city if we were interested, given the fact that our (water) well fields were on [the property in question], and other developers from Athens County were expressing interest. We did enter into negotiations."

Bias said that the memorandum of understanding that the city has agreed to says that in the event that Silar obtains a free-and-clear title, the city would pay $1.75 million for the property.

"We would anticipate that this would take some time since the present owner has expressed throughout the community that he is going to fight this (foreclosure)," Bias said.

In order for Silar to "obtain a free and clear title" on the property, they would have to foreclose on UE and company President Richard Conard. Bias said that Silar does plan to foreclose.

Silar Advisors declined to comment on Tuesday.

"At the point that they either receive the deed in lieu of foreclosure, or complete the foreclosure action, the city of Athens has entered into an agreement to pay $1.75 million for the property," Bias said. "So it may take some time to get it."

Many homes and condos have already been built in the development, though much of the proposed project, including an 18-hole golf course and retirement facilities, has yet to be built. The 600-plus acres that the city has been contacted about include the proposed golf course, 29 building lots and the project's third phase.

Bret Adams, Conard's attorney, pointed out that Conard has already sued the city once in relation to the development, and said that Conard already has an consent agreement to build the golf course.

"It certainly appears to us that the same City Council people who were involved in the previous litigation are trying to use this issue with Silar to stop the construction of the golf course," Adams said.

The previous suit, which was eventually settled out of court, claimed that city regulators had suddenly begun demanding that the contractor obtain a number of permits and approvals before proceeding further with its development.

Adams suggested that UE and Conard will fight the city's purchase of the land in court if it comes to that.

"If they attempt to foreclose, we will defend it," Adams said. "And we will bring the city in."

He said he has invited city officials to discuss the matter but to no avail.

Adams questioned the memorandum of understanding reached by the city, saying that Athens has agreed to pay considerably more than the value of the land.

"It's a reflection of their lack of understanding of the value of the property," Adams said. "The city, in negotiating that deal, knew that Dr. Conard was talking directly to his mortgage company to pay them a lump sum and buy back the mortgage."

Adams said that Conard and one other local developer had offers around $1 million on the table before the city came in with its $1.75 million offer. These $1 million offers were made before City Council held a special session to adopt an ordinance to negotiate a purchase of the property, according to the UE attorney.

"We did not have a deal finalized, but I've done enough deals in my life that, before the city came in, I thought that we could have resolved it," Adams said. He questioned why city officials didn't attempt to contact Conard or his counsel before entering negotiations with Silar.

Adams said that Conard is not in default on the mortgage and that he doesn't believe the city was told that it is. He also questioned Bias' motivations in the deal, pointing out that both Conard and Bias are in the assisted-living/senior facility business.

Bias works as executive director of Hickory Creek Nursing Center in Athens.

"I think the question that has to be asked is, whose agenda is Bias promoting? Is it his own agenda, to keep Dr. Conard out of the assisted-living business? Or is it truly about wellheads?" Adams asked.

In response, Bias reiterated that the city had been approached by Silar about whether it was interested in the property, considering the location of the well fields. After learning that other local developers were looking at the property, Bias said, City Council was approached and voted unanimously to negotiate.

"It sure sounds like they're swinging wildly," Bias said. "I don't know of any type of assisted-living that either, A, Dr. Conard has over there, or, B, has any realistic plans for ever locating over there. Beyond that, since we are having lawyers make these kind of charges and threatening lawsuits, I think, at this point and from now on, it would be best if I make no further comment."



THE ISSUE OF THE CITY'S wellheads on the property has seen a lot of play over the years, with opponents of the golf course citing dangers of contamination to the city's water supply and advocates claiming studies have shown there is no risk.

Adams maintained that a study included in the previous litigation showed that there is no risk.

City Auditor Kathy Hecht, who worked to develop the city's wellhead protection ordinance, has previously said that there is a risk and that the ordinance was put in place to mitigate that risk.

UE has worked with the city in the past to protect the wellhead area.

City officials said in June that their interest in buying the property was meant to protect the wellheads from other developers who might purchase the land if it is foreclosed on, and who wouldn't be as familiar with the wellhead protection regulations.

Adams called the statements made by city officials reckless, saying that they hurt the value of the development.

"Common sense would tell you that you cannot go to the newspaper and start making public comments about buying someone's note and think that it would not have a negative effect on the property," Adams said.

Plans for University Estates have called for single-family homes, condominiums, luxury apartments, gated communities, an 18-hole golf course, hotel/convention center, equestrian center, day-care center, commercial properties, bike paths, assisted-living center, skilled nursing-care center and other facilities. While the golf course is part of the parcel sought by the city, it's uncertain which of the other proposed facilities and amenities would be affected by a land sale. The fact that it involves the lion's share of the parcel, however, suggests the impact would be substantial on unfinished parts of the project.