Friday, March 29, 2024

Lost revenue

Posted

Granbury city officials will seek to undo or renegotiate a contract involving “prime real estate” that was signed in 1982 and do a better job of protecting the city’s financial interests through diligent contract reviews.

Those determinations were made last week after Mayor Pro Tem Tony Mobly asked for an agenda item involving a lease amendment to be moved from the consent agenda to the deliberation agenda so that it could be discussed.

The issue involves a contract between the city and owners of The Lodge on East Pearl Street. The legal document was signed 37 years ago.

At that time the city owned a swimming pool and tennis courts at that location and leased them to the property owner for $300 per month. There is a parking lot there now, and it is adjacent to the City Beach.

The contract stipulated that the agreement was to be reviewed after five years and then in 10-year increments after that.

Based on property appraisals that were to be done by the city and The Lodge, the monthly rent could go up to as much as $600 per month but no more than that.

The appraisals and contract reviews that should have occurred in 1987, 1997, 2007 and 2017 never happened.

Mobly said that even if the city had raised the monthly rent by only half of the maximum allowed under the contract, the city would have netted about $177,500 in revenue.

Mobly said that the city should be diligent in reviewing such agreements, especially when they involve “somebody at this dais.”

He was referring to former council member Gary Couch, who owns a number of condos at The Lodge and was on the council when the contract should have been reviewed in 2017.

Couch was not involved in the original agreement.

City Manager Chris Coffman said that “the smart thing to do” may be for the city to negotiate a better lease or sell the property, which he referred to as “a prime piece of real estate.”

He stated, “I feel that we are renting it way below market value, and that is a concern constitutionally for the city because we are required by the law to not give away goods and services below fair market value.”