More than 20 years ago, an unusual bond agreement allowed a Mississippi medical care company to build the Crystal River Geriatrics Center with one hitch:
In 1999, the nursing home would become the city's property.
The facility _ appraised as high as $2.8-million _ has been an ace in the hole for the city. Now the Crystal River City Council seems poised to accept a $1.64-million offer from Waverley Group Inc., the Jackson, Miss.-based company that operates the nursing home.
Council members acknowledge that they might be able to lure a better offer than the Waverley Group's. But given the cost of marketing the property and the uncertainty of how much it might be worth two years from now, council member Levi Phillips made this cliched conclusion:
"A bird in the hand is worth two in the bush," Phillips told council members at a Tuesday night meeting, where city officials met with Waverley president Bobby R. Arnold.
Council member Ron Kitchen agreed, saying the offer was attractive because "it's neat, it's clean, and it's done."
He was also pleased that the Waverley Group would pay the city within the next few months, allowing the money to generate interest for Crystal River even before the city takes over the property in two years.
Also in the agreement, the city would give up its claim to the certificate of need _ a valuable permit that allows the nursing home to operate. The certificate itself could be worth hundreds of thousands of dollars, and City Attorney Clark Stillwell has argued that the building owner _ in this case, the city in 1999 _ might be entitled to the certificate.
Council members agreed Tuesday night that paying legal costs to fight for the certificate would be counterproductive.
"In a lot of ways, this is a windfall for the city," Kitchen said, "and I can't see litigating a windfall."
Not all members of the panel were as eager to accept the Waverley Group's offer. Council member Daryl Oster said he would like to see a figure closer to $2.1-million. Kitty Ebert supported the offer cautiously.
Council member Claire Laxton was out of town and could not attend the workshop, and Ebert said she is interested in hearing Laxton's point of view.
"We'll see what Claire says, but I think I can go with this," Ebert said.
The council will approve or reject the proposal at its meeting Monday. Waverley has said that its offer will expire Tuesday if not accepted.
Last year, the Waverley Group offered $100,000 for the facility _ a figure the city scoffed at. During negotiations, the company initially offered $1.49-million, plus up to $25,000 of the city's legal fees and $15,000 in donations to charities or civic projects over each of the next 10 years.
Council members, uncomfortable with choosing which local charity should receive the money, asked that Waverley add $150,000 to the purchase price rather than make $150,000 in charitable donations.
The facility has always promised a financial boon for the city of Crystal River. In 1975, the nursing home company worked with the city to receive tax-free revenue bonds. The city, in turn, owns the property once the bonds are paid off.
The city made no investment in the project and paid for none of the construction or upkeep costs, yet in 1999 it will own the property and earn the chance to sell it.
At Tuesday's negotiations, Waverley pledged to close the deal within 60 days after the council approves it. That $1.64-million is comparable to the amount of money the city generates in one year from its water and sewer customers.
City Attorney Clark Stillwell has argued that the city should "shop around" for potential buyers as is tradition. But Tuesday, he weighed the pros and cons of the agreement and reminded council members that their duty is to seek fair market value for Crystal River residents.
Stillwell suggested that selling the nursing home to its current operator will prevent disrupting residents of the facility.
"That's a real value, and no one's mentioned that," Stillwell said.
He also reminded council members that the value of the property _ appraisals now range from $1-million to $2.8-million _ could decline while the city seeks buyers.
"You can't wait to market it until Jan. 1, 1999," Stillwell said. "It'll go empty, it'll go stale, and you'll lose value."
Still, Oster wasn't convinced. Among his last comments to the Waverley company president, Oster asked:
"Is this the best you can do?"