The Pipestone City Council encountered a snag in the process to potentially sell the former Carnegie Library property.
During its May 16 meeting the council approved bid documents and scheduled a bid opening for the sale of the property for June 20. According to the bid documents, the buyer would have five years to repair and restore certain elements of the building or the property would revert back to the city.
City Administrator Jeff Jones said during the council’s June 6 meeting that the city’s attorney had since informed him that the Minnesota Management and Budget (MMB) office, which would have to sign off on the sale due to a Minnesota Historical Society grant the city received for the property several years ago, would not allow a right of reverter clause in the purchase agreement.
Jones said that he did not proceed with advertising for bids after learning that the MMB would not allow the council’s desired terms.
Councilor Dan Delaney asked why the MMB would not accept a right of reverter.
“They don’t want that kind of reverter language in it just because they would prefer to have a clean sale and then if the city needed to step back in that would be on the city’s dime to do so and pursue legal action,” Jones said.
He said the city could have a development agreement with the buyer that would include the five-year requirement for repairs, but that the only recourse the city would have in that case was to pursue legal action to enforce the development agreement if the terms were not met.
The council voted to table the matter until its June 20 meeting to consider its options and gather more information.
During the May 16 meeting, Delaney said citizens had expressed concerns to him about selling the property and he expressed some reluctance to sell it as well, suggesting that the city let voters decide via a referendum whether it should spend the money to repair the building. He ultimately cast the lone vote against approving the bid documents and scheduling the bid opening at that time.