Has Keeler hit the chopping block again?

It was on, then off, then on again and now, who knows.

The city of Sequim’s potential purchase of the Keeler property, a deal that has been in the works since 2007, may have hit yet another obstacle. According to city attorney Craig Ritchie, it’s the purchasing agreement that’s the problem. Simply put, the city may or may not be $25,000 short.

The city, according to a memo to council, has written a check for $175,000, which includes $25,000 earnest money and a $150,000 down payment to be presented at the property’s closing. The check, which has yet to go through, is the first in a series of payments due March 31 of every year until 2012.

However, the Keeler family’s attorney now has said $200,000 will have to be paid at the time of closing, citing a document that sets forth the debt. The document, according to Ritchie, is in direct conflict with the sale’s deed of trust, which puts the initial payment at $175,000. Ironically both documents have the same overall purchasing price. Eventually the city will have to pay the $25,000, it’s just a matter of when: now, as the Keelers’ attorney would have it, or later.

The Keeler property is 45 acres of preserved farmland. The Keeler family offered to sell the city 35 acres, then donate the other 10. It looked as though the city would take the offer, but a reassessment of the land made the purchasing price too high for the city to afford. The Keeler family then agreed to sell the property for the original assessment, making the purchase once again a viable option. Once purchased, the city would keep the parcel as open space with only passive recreational use, such as hiking or wildlife viewing.

At its April 14 regular meeting, Ritchie asked the city council to make a decision whether to amend the purchase agreement to provide for the initial $200,000 or to move ahead with the original $175,000 payment.

Because the decision has the potential to end in litigation, Ritchie and the council went into a 15-minute executive session to discuss the matter. Upon returning, Councilman Walt Schubert made a motion directing Ritchie to move forward with the original $175,000 payment price. Councilwoman Susan Lorenzen said that she would not support the measure, nor did she support the purchase at all.

“Frankly I don’t think the city can afford this property,” Lorenzen said.

Councilman Erik Erichsen concurred.

“I think we should just back out of it,” Erichsen said.

Councilman Ken Hays said that although he in part agreed with Erichsen and Lorenzen, he still was voting to move forward. Mayor Laura Dubois shared Hays’ sentiments.

“I think we need to be more careful in future transactions,” Dubois said.

The measure passed 4-2. According to Ritchie, the action in no way means that the purchase of the Keeler property is a done deal. The Keeler family could accept the $175,000 as is or withdraw their offer, taking the $25,000 earnest money, which could result in litigation. Ritchie said that the title company handling the closing could tie the money up in court in what is called an “inter-pleader action” and both sides would have to enter into lawsuits to get it back.

“I have no idea what they’re going to do,” Ritchie said.

Following the vote, Schubert said that he was proud of the council for its decision to move forward.

“We did the right thing for the people of this town,” Schubert said.

Schubert added that Sequim historically always has had a way of coming up with funding.

“Frankly I don’t think the city can afford this property.”

— Susan Lorenzen, Sequim City Council

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