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December 15, 2016


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Do I recall correctly that one of the arguments made for passing the bond measure in November was that buyers were lining up to purchase the O'Brien site, and if the measure failed the site would be lost? If so, why were the proponents not corrected by City officials? That would have been a misstatement, since the City, at that time, had secured the property until the end of May, 2017. Correct me if I am wrong about this.

Jim, you're mostly correct. I remember being told by somebody -- Chuck Bennett, T.J. Sullivan?, am pretty sure it was Bennett -- that if the bond measure failed, the O'Brien site would be lost to the City of Salem.

But actually, as the lease/option agreement says, the City had the ability to pay $50,000 on or before December 1, 2016 to have an option to buy the site that runs until May 31, 2017 (assuming a second $50,000 payment is made on or before March 1, 2017. The City made the first payment, so they've got an option to buy the O'Brien property.

I didn't ask Courtney Knox Busch when the first option payment was made. One would think that this would have happened after the November election, since there wouldn't be a need to pay for an option if an actual purchase of the site was going to happen soon. So even though the City may not have had a purchase option before the election, they had the ability to pay for one up until December 1, 2016.

What confuses the matter a bit is that before the election the City did have a lease that allowed them to use the property until June 30, 2017. My impression, which may or may not be true, is that this "sweetheart" arrangement with the owner of the property (the City isn't paying out cash for the lease, just assuming expenses on the property) was predicated on an assumption that the bond measure would pass.

Thus Shires Property, LLC may have figured that since a sale likely was pending to the City of Salem, the lease was a goodwill gesture of sorts. Also, since the lease terms obviously are different from the option terms, if the City decided not to exercise the option, another buyer probably wouldn't be able to do anything with the property until after mid-2017 when the lease expires. So Shires Property, LLC has essentially gotten the City to assume the costs of maintaining the property (including property taxes) for a year.

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