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February 22, 2020

1/21/2020 7:30:00 AM
Oneida Vilas Transit Commission tables lease decision
Kayla Houp
Of The Lakeland Times

The Oneida Vilas Transit Commission (OVTC) voted earlier this month to table further discussion on the possibility of leasing or purchasing a new facility in Eagle River. The move comes just months after the commission authorized transit manager Roger Youngren to pursue the Eagle River property back in October.

According to OVTC chair Erv Teichmiller, the commission's attorney, John Houlihan, had "great difficulty" contacting the property owner's attorney to come to an agreement.

"There were essentially three issues that were being contested," Teichmiller told the commission during the panel's Jan. 10 meeting. "One of them having to do with the purchase price of the lease purchase agreement."

According to Teichmiller, Houlihan thought there needed to be language in the agreement that allowed for the commission to negotiate with the purchase price, identified as $455,000, should the appraisal of the property come in at a lower price.

Teichmiller said the bank was "unwilling to negotiate that item, so their attorney was unwilling to allow for that language to be included."

He added that an appraisal had been completed with the appraised value of the property coming in at $395,000 including furnishings, a $60,000 difference from the purchase price.

Teichmiller said their attorney suggested not committing to the lease purchase agreement with the fixed purchase price.

"Have you dealt with them?" OVTC vice chair Bob Mott asked Youngren. "Do you get the feeling that they are willing to negotiate?"

"No," Youngren said. "Not at all."

Committee member Chuck Hayes expressed concern regarding how to justify or explain the purchase to the public and the commission's ridership base.

"They'll only see, 'the Transit Commission' paid $455,000 for a property that was appraised at $395,000," Hayes said. "We're dealing with public monies here, and that's a concern to me."

Committee member Steven Schreier expressed a similar concern with the grant writing process.

In addition to the language regarding negotiation, Teichmiller said the other two issues with the purchase agreement were with the potential grant and the penalty for default payments.

"Their position is that, prior to negotiating, or exercising an option, the grant has to be in place," Teichmiller said. "We understand that. We wouldn't exercise the option if we didn't have a grant."

He continued, referring to the issue of default of rental payments. Teichmiller explained further, stating that should the Commission default in its payment of the lease, it would result in an automatic eviction.

"It was an automatic eviction and they're not willing to make any changes in that," he said. "A couple of issues that the line is drawn in the sand and they're not willing to go over that."

Teichmiller said both the fair market value and assessed value came in lower than the asking price, prompting concern that the property was "overpriced."

Four options

Hayes identified three possible options the OVTC could pursue, one being walking away from the facility, a second to pass a motion agreeing to the asking price and the third to authorize countering the asking price with a lower offer of the appraisal price.

"Another option we should consider is the possibility of still leasing it," Youngren said.

"The question that gets raised is do we want to lease if we're not going to buy it?" Teichmiller asked.

Commission vice chair Bob Mott said the Commission had been looking for a different facility in the Rhinelander area for approximately two years and hadn't found one that suited its needs.

"The preference would be to stay in the Rhinelander area, but we don't have a choice right now," Mott said.

He suggested making an offer at the appraised price and telling the seller they were interested in the lease arrangement, but had issues with the purchase price.

"Even if we could afford it if the money was there, public funds ... I don't think we can justify that to the public," Hayes said.

Rhinelander property

Youngren also brought up a property in Rhinelander that Schreier had found on Hwy. 47 that he and Schreier were going to view later that day.

Schreier said he wasn't going to mention the Rhinelander property, as he wasn't sure the Commission could discuss it as it wasn't an agenda item.

"It's just a piece of information," Teichmiller said. "There is another property available in the Rhinelander area that can at least be explored, and at a price considerably lower than what this is."

Teichmiller suggested informing the owner of the results of the appraisal and the Commission's inclination was the lease purchase include that price.

Following additional debate, the board approved a motion to table the discussion pending more information to be provided at the February meeting.

Other items

In other business, the panel:

• Approved a motion raising local fares from $1 to $1.25 effective Feb. 1.

The Northwoods Transit Commission's punch card system will still be available for riders to purchase, with the information regarding the fare increase available on the NTC's website and on the busses.

• Decided to review the conflict of interest policy presented Jan. 10 for further discussion at a future meeting.

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