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Controversial Land Deal Back on Huntsville City Council Agenda

by Walker County News Today staff

Like a ghost from Christmas past, a previously attempted but failed land sale was back on the agenda of the Huntsville City Council meeting last Tuesday night.

As readers may recall we reported on a series of questionable events beginning about two years ago that included the City Staff accepting a bid for property that was received after the formal bidding deadline had passed and after other competing bids had been opened and publicly read at City Hall.

The late bid was from an out-of-state group based in Atlanta, Georgia and proposed an amount higher than the bids previously opened and read. The late bid was received in an e-mail, as opposed to the formally required sealed bid documentation, but the e-mail was sent to the wrong department in the City and the e-mail documentation did not comply with the City’s bid requirements made public several weeks prior to the bidding deadline.

The Atlanta-based developer, Stonemont Financial, e-mail also stipulated several other events that had to occur before it would agree to close the deal and it provided a no harm escape clause for itself if any of those events did not occur.

The property in question was a .615-acre tract located at 1930A Sam Houston Avenue just behind Humphrey’s Bar and Grill. The City had received sealed bids from two local bidders, Charles Smither, President of Area Management Services, and local area landowner George Russell.

The City is proposing to sell only the back portion of the property without the strip of land that connects it to Sam Houston Avenue; the result is that the city will attempt to sell a landlocked tract of land.

As previously stipulated by the City the bids were opened and publicly read at City Hall at 2 p.m. on the bid deadline day of March 9, 2016. The Smither bid was for $12,500 and the Russell bid was $12,000. The bid from Atlanta based Stonemont Financial that was received later was for $30,000.

In spite of the irregularities, the City Staff recommended in April 2016 that the Council accept the late and incomplete bid from Stonemont because its bid was “in the best interests of the City.”

But that recommendation was publicly challenged by Smither, Russell and Tarek Maloof, another area property owner familiar with the City’s procurement processes. They challenged the legality of the irregularities and wanted to know if Stonemont had advance knowledge of their bids before sending in its own bid.

“Did the city fall down on the job, or does Stonemont make all of its deals in private?” Smither asked. He urged the council “to act to ensure that staff follows proper procedures, especially in the case of formal sealed bids.”

Smither told council that he thought the fair thing to do would be to reject all three bids, his included, and start over. But Maloof told council Smither’s bid should be accepted as the high bid given that it was received in accordance with the city’s published procedures. Maloof also recalled other previous purchasing irregularities and criticized the City for setting minimum sales prices well below market value.

In the end, after adjourning into executive session to receive legal advice, the council decided to accept Smither’s recommendation and reject all three bids.  From a public standpoint nothing further has apparently happened concerning this property until the meeting last Tuesday. Councilmember Keith Olson, who put the Item on the agenda, proposed that the Council direct the City Staff to again attempt to sell the property, once again not including a small 12-foot-wide strip that provides access from the main portion of the property to Sam Houston Avenue.

Councilmember Emmett asked why this strip was being excluded from the sale. City Manager Matt Benoit explained that, without the City’s knowledge, this strip had been paved over and painted for parking “by someone” and is currently being used by one or both of the adjacent businesses (Humphrey’s and Barefoot) for that purpose.

Councilmember Ronald Allen asked Mr. Benoit for clarification on that point.

“Are you telling me that a business called a paving company and a striping company and had them pave City property? Did we know about that?”

Mr. Benoit answered “No.”

Councilmember Allen persisted,  “You mean that there may be other properties that have been paved that the City owns that may have been taken over by someone, maybe not even a business, that we don’t know about? Is that how it works up here? – – How in the world did the City not know?” How do you take City property and pave over it?”

City Attorney Leonard Schneider then interjected that that may be another discussion that needs to be properly posted before he can legally advise the council, but he said that “many cities have their easements built over – – because nobody looks at all the surveys.”

In a separate part of the discussion, Councilmember Rodriquez asked:  “If we sell the property that that inlet leads to, how is the property owner gong to get in there?”

Mr. Benoit answered that the new property owner would have to control adjacent property “somewhere other than that.” That led Councilmember Olson to characterize the purchase as an “investment,” but he said, “There are people who are speculating in those areas.”

When the lengthy discussion ended, the Council approved the motion to sell the property as a landlocked parcel without the access strip to Sam Houston Avenue included.

The sale would have to comply with State law, the City Charter and the City’s purchasing policies.

3 comments

  1. CORRUPTION IS RAMPANT AT CITY HALL. PERHAPS TDCJ NEEDS TO ADD A NEW WING TO HOUSE ALL OF THE CRIMINALS AT CITY HALL.

  2. I agree! Doesn’t sound ‘ethical’ to me either, but who am I to Judge? I just try to serve all my clients honestly & professionally.

  3. Based on the look of the pavement, on the section of land that was paved over, Humprey’s seems to be the one that benefited from the new parking spaces (that is based only on the picture, which seems to indicate that the parking surfaces of the parking spaces and the rest of Humphrey’s parking lot has pavement that closely matches each other). I think that should be investigated and the city should take steps to rectify the assumption of the land. If it is an easement it should be used for access. Property sold without access will not receive high bids!! The citizens will get “taken” twice if folks are allowed to bid on the property before the easement assumption is corrected.

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