Hillsboro’s ‘mystery business’ land deal back in play

Within two months of withdrawing its option with the city of Hillsboro to purchase property in Hills?boro Heights for an unnamed Fortune 500 company, the same land agent has submitted an identical purchase agreement for the same property.

The city council, following a long discussion that included input from the owners of two businesses that could be adversely affected by the potential new business, decided at its July 15 meeting to send a modified version of the agreement back to the broker as a counter-proposal.

If the land agent agrees to the city?s revised agreement, the city would be legally bound to sell the property or potentially face a lawsuit, according to city attorney Josh Boehm.

As before, the name of the Fortune 500 company was not identified during the meeting, though frequent references were made to Wal-Mart as the land agent?s likely client. During the discussion, it was stated that Mayor Delores Dalke remains the only city official who knows the name of the client company, but the mayor is still bound to secrecy by a confidentiality agreement.

The holding company dealing with the city is Southeast Kansas Development, LLC, which is owned by Ben Hawkins, a partner in a larger company called Hawkins Edwards Inc., based in Spokane, Wash.

When the original agreement from SKD was submitted in March, Clint Seibel, the city?s economic development director, said the client company would be selling fuel, groceries and pharmaceuticals at the location.

Attending Tuesday?s meeting were Eric Driggers, owner of Green?haw Pharmacy, and Paul Barnes, one of the owners of Heartland Foods. Both men said allowing such a business in town — particularly a Wal-Mart-owned store — would pose a significant threat to their businesses and others.

When asked by Driggers if the city could simply reject the agreement submitted by Hawkins, Boehm and City Admini?strator Larry Paine said the city is in a difficult position. On the one hand, it doesn?t want to hurt local businesses; but on the other hand, it must follow the law in regard to the sale of publicly owned land. While a private land?owner seller could reject an offer from a potential buyer, they said, a public entity is legally obligated to accept such a proposal as long as it substantially meets the conditions outlined in previous land-sale agreements.

Paine, in consultation with Boehm, suggested the council?s most appropriate response would be to send a counter-proposal contract to Hawkins that would better reflect the city?s previous land contracts. The council eventually voted 4-0 to develop a counter-proposal that would:

— eliminate a clause stipulating another 90-day feasibility study, thus requiring SKD to immediately purchase the property for the sum of $55,000.

— change a provision declaring the city ?shall immediately purchase the property? from the buyer if construction has not begun on the project within 24 months, to ?may? purchase the property from the buyer.

— eliminate a paragraph stating that the closing would occur no later than 30 days after a proposed 90-day feasibility study. The feasibility study was essentially completed after the original agreement had been approved, Paine said.

— eliminate a confidentiality clause stating that the city ?use reasonable effort to keep this agreement confidential.? Paine said the clause refers to the contract terms, not the identity of the client. Because a public contract is always available for public perusal, keeping the terms of the contract confidential is a non-issue.

A more complete version of this story will appear in the July 23 edition of the Free Press.

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