Mayor mum after dollar store objects
Dollar General objected to the legality of Marion selling land to a competitor, but mayor David Mayfield dismissed the objection and failed to share it with other council members before their meeting last week.
Mayfield apparently relied on an opinion written a day earlier by city attorney Susan Robson. But Dollar General’s letter cited a section of Marion’s original contract that invalidated a heading that Robson’s opinion depended on.
Dollar General, aware the city had signed an agreement to sell reserved land in its industrial park to Family Dollar and Dollar Tree, sent an overnight letter Aug. 3 requesting further information on the other sale.
“It is our understanding that the lot will be developed as a Family Dollar and/or Dollar Tree,” the letter reads. “Please review Recital B on the real estate purchase and sale agreement dated Jan. 5, 2015.”
The recital is the portion of the city’s sale agreement with Dollar General that prohibits sale or lease of other city property to a competitor.
“We’re currently working to understand more on this and look forward to constructive conversations with the city,” Dollar General spokesman Crystal Luce told the Record.
Mayfield’s response to Dollar General’s letter was obtained by the newspaper late Tuesday after the paper requested it under the Kansas Open Records Act.
Mayfield said Dollar General had not attached, as its letter stated, a copy of the 2015 contract. Mayfield attached a city copy of the agreement, which specifies stores the city agreed not to allow. They include Family Dollar Store, Bill’s Dollar Store, Fred’s, Dollar Tree, Ninety-Nine Cents Only, Deals, Big Lots, Walgreens, CVS, Rite Aid, and any Walmart concept.
The city’s agreement includes a clause that this covenant survives closing.
The contract was signed by then-mayor Todd Heitschmidt.
Mayfield’s response indicated that an exhibit included with the agreement limited this to only one block of the industrial park.
However, this limitation appears only in a section heading, and a separate section of the agreement states that headings are not binding and that the actual language, which does not apply to just one block or even to just the industrial park, took precedence.
Apparently, Mayfield didn’t share it with other council members. Asked whether they had seen the letter, three council members denied knowing anything about it.
“No, I’m not aware of anything,” council member Ruth Herbel said. “The only thing I’m interested in is the drainage ditch.”
“I don’t know of any,” councilman Jerry Kline said.
“I’m not aware of anything from Dollar General,” councilman Chris Costello said.
Councilman Susan Gray did not return a call. Mayfield also did not return repeated calls seeking information.
In response to questions from the newspaper, city administrator Roger Holter acknowledged the letter before it was released as requests under the Open Records Act.
“Yes, there has been correspondence between Dollar General and the mayor,” Holter confirmed.
City clerk Tiffany Jeffrey’s response to the open records request included a copy of Mayfield’s response as well as Dollar General.
In his response, Mayfield wrote: “It is our belief and opinion of our legal counsel that the agreed upon covenants applied only to the eight parcels defined in Exhibit A of the aforementioned sales agreement. The parcels referenced in Exhibit A constitute the entirety of Section 1 of the Batt Industrial Park addition to the city of Marion.”
The land that the city agreed to sell to Dollar General’s competitor is a reserved are adjacent to Section 2.
Mayfield attached copies of exhibits A and B from the original agreements. He did not attach a copy of the complete real estate sale agreement, which includes a clause that the covenants not to sell other property to competing businesses survive the closing.
The reference to Sections appears only in a heading over Exhibit B. The contract says headings “are inserted for convenience only and are in no way to be construed as part of this agreement or as a limitation in the scope of the particular portions of this agreement to which they refer.”
The city agreed July 27 to sell a reserved section of the industrial park at the intersection of Kellison and Roosevelt.
The area, which also serves as a buffer to adjoining residential areas, is reserved for drainage and utility easement.
More than a dozen neighbors of the property attended last week’s city council meeting to object to the sale. They brought a list bearing signatures of 63 residents who object to the sale.
Most opposed loss of the drainage. Others, like Orville Pfeiffer, objected to the city “turning its back on Dollar General.”
Peabody, which already has a Dollar General, has a nearly finished building that will house a Family Dollar and Dollar Tree combination store similar to the one proposed for Marion. The project is close enough to being finished that signs seeking to hire employees are posted on its door and on the south of the building.
That building is just yards down the street from Peabody’s Dollar General store. Both properties were purchased from private owners.
According to Hillsboro economic development director Anthony Roy, Hillsboro was recently approached by a national real estate agency that asked if it had property it would be willing to sell. The real estate agency didn’t specify what business might purchase the property. Hillsboro also has a Dollar General.
Nationwide, Family Dollar, Dollar General, and Dollar Tree have engaged in various bidding wars to attempt to purchase each other’s stores.