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‘Gray Lady’ of First Street to receive makeover

Written by Amy Mayhew
Friday, June 28 2013

102 First Street, Holly.

HOLLY, Michigan - While John Lauve won’t be the man to give the 102 First Street home a total makeover, he will forever be credited – or blamed, for saving the three-story dilapidated structure from demolition.

Last November, Holly’s Downtown Development Authority (DDA) allocated approximately $23,000 to buy the property, and promptly deeded it to the village of Holly for the purpose of demolishing the home and potentially using the property for a 30-35 space parking lot.

In January, Lauve lobbied to save the historic home, calling it a “gem,” and telling council members its refurbishment would only enhance the “Mill Plaza” area. Council initially rejected Lauve’s pleas, and in February, condemned the “Gray Lady,” and prepared for demolition.

That month, Lauve filed a complaint with the Oakland County Prosecutor’s Office, alleging violations of the Open Meetings Act, specifically against the DDA for the way in which the property transfer was conducted with the village of Holly.

Lauve’s complaint brought demolition plans to a grinding halt, and in April, Lauve again asked council to consider selling the property to him for $20,000, adding that he would also incur all legal expenses associated with the transaction. Once again, council unanimously rejected Lauve’s proposal.

On April 5, the Oakland County Prosecutor’s Office determined that an OMA violation had in fact occurred since the deliberations and final decision on purchasing real estate should have been conducted in and open meeting. Regardless, the Oakland County Prosecutor’s Office felt the violations were unintentional and isolated, and took no action against the village of Holly.

Later that month, the topic once again found its way to council’s agenda, this time to determine if council was interested in putting the property back up for sale, but with certain stipulations to be met by a potential buyer.

A 4-3 vote on April 24 put the property back up for sale for a 30 –day period. The stipulations were that buyers would need to provide council with a proposed use for the property, proposed property improvements, a timetable for making the improvements, projected job creations spawned by the project, and business and financial plans for the property. Additionally, the buyer would be required to provide a $25,000 surety bond for a period of six months while exterior rehabilitation occurs. The original stipulations specified if the buyer didn’t complete the exterior rehabilitation within the six month timeframe, the surety bond would revert to the village and would be used for demolition costs. The buyer would also assume all of the legal fees that have been spent on the property to date – something Walker estimates to be between $3,000 and $5,000.

Since that time, the village of Holly received three bids on the property – two from Lauve, and one from Walled Lake businessman, Matthew McDonald of Sterling Trust.

The matter was discussed during the June 25 Village Council meeting.

John Lauve

Lauve’s initial bid was for $20,000.13 in the form of a 2-year balloon land contract paying 3-percent interest. His second bid was for $31,072.13, a 3-year balloon land contract paying 4-percent interest. Both bids also promised a surety bond in the amount of $25,000.

Council was offered no reasoning as to why Lauve offered two separate bids.

The third bid offered by McDonald was for $30,100 cash, and $25,000 cash up front to serve as a guarantee that the exterior work will be completed in the stipulated six month time frame from the time of closing.

Presenting a painting of “The Gray Lady” as created by local artist William Brody, Lauve hit the highlights of his proposal one final time for council.

Lauve’s handwritten plan for the structure agreed to the six month timeframe for exterior renovations, and said that the interior layout plan will be developed upon access to the home.

Lauve envisions the renovated home as a “Welcome Center” for Holly. “Being open and visible will stimulate the entire business community’s atmosphere,” Lauve’s proposal reads, adding that local workers, hardware and lumber businesses would benefit from the work.

John Lauve sued a William Brod...

“The incubator office will yield unforeseen benefits,” he wrote. “Having a building of this structure and location will attract future jobs.”

As for his business plan, Lauve said the structure would be integrated into the Mill Plaza, thus improving the overall image of the area, and that it’s close proximity to Dryer Funeral Home and the Post Office would enable it to become a “center of activity.”

Councilman Ryan Bladzik asked Lauve for further clarification in his proposal.

“You mentioned a Welcome Center,” Bladzik said. “How is that going to be paid for in terms of operations, materials, staffing, utilities – things like that? Are you going to be running that Welcome Center yourself?”

Lauve said there are two options – that the DDA or the Chamber of Commerce would possibly participate in running the Welcome Center, or that a future retailer would agree to run the Welcome Center as part of the lease agreement.

“When people come to the building, they would have an array of information and brochures about all the businesses in town and be open Friday, Saturday and Sunday – and that would be their responsibility to do that,” he said.

Lauve said he also envisioned possibly having “ambassadors” staff the Welcome Center over the weekends. “If all the people who have a business in town put one day a year to staff that, the responsibility would be spread out and you could run it in the summer.

“I want the chance to dance with the Gray Lady,” Lauve said before finishing his presentation.

While a last minute emergency prevented McDonald from attending the meeting, his proposal stated that he agreed to the six month timeframe for exterior renovations, and expected that the entire project, inside and out, would be completed within a year.

According to McDonald’s proposal, the proposed use for the property is multi-family residential/commercial, depending on need and/or interest within the geographic area. “This type of development allows for a small business to occupy a portion of the property as commercial and additionally maintain a personal living space,” he wrote.

As for property improvements, McDonald’s proposal acknowledges that the existing property has sustained significant damage through lack of property maintenance and water damage. “The interior of the structure will be completely taken down to the stud walls to ensure the structural integrity of the building and for design purposes,” he wrote. “The structure will be bought up to the current property maintenance code requirements as prescribed by state of Michigan law. Should the structure be utilized as partial commercial, all improvements will meet the property maintenance code and the American Disability Act requirements.”

McDonald envisions creating a live/work environment within the community and said that he is seeking to utilize the space commercial for medical office space, insurance offices or some type of specialty retail shop, depending on the type of businesses authorized by the zoning ordinance for the village of Holly.

As for finances, McDonald’s proposal revealed that funding for all improvements would be made through an existing Individual Retirement Account (IRA). “The loans will be leveraged utilizing the two properties currently owned outright in the village through the buyer’s IRA,” the proposal reads.

Ryan Bladzik

Bladzik, who voted against putting the property out for bid in April, said he still had concerns over what would happen if the work wasn’t completed per the specifications.

“The surety bond would be paid after the building is closed on so that the ownership would go to whomever we award the bid – so if they don’t complete the work, we would go in and finish the work on private property using the money they put up?” he asked.

“Yes, and that would be part of the agreement,” Village Manager Jerry Walker said.

George Kullis

“We wouldn’t finish the work – we would then demolish the home as per what we had decided,” Councilman George Kullis said. “Isn’t that what it was for?”

“Let’s say hypothetically, they’re 75-percent done – I mean, are we demolishing a building where the exterior then has that money invested in 75-percent done, or are we finishing the job on somebody’s private property?” Bladzik asked.

“In that particular case – with 75-percent done, I would say the order would be to go in and finish the work on that property with the bond that was posted,” Walker replied.

Councilman Bob Allsop questioned the overall likelihood that the buyer would be able to complete the exterior work in the allotted six month timeframe.

“Six months isn’t long for it – six years would be fine,” he said. “I’m not making fun – I’m just saying it’s in pretty bad shape, and it took me 12-months to do the outside of my house and they worked every day, seven days a week, 10 hours a day and my house isn’t as big as that place.

”Bladzik presented another hypothetical question, this time asking what would happen if the buyer fails to complete any work on the home. “How are we going to demolish private property?”

Chris Rankin

Councilman Chris Rankin asked if any provisions had been made for the property to revert back to the village if, after six months, the work has not been completed as promised.

“Not at this point, but I think if that’s the direction that council is heading, there could be a situation in which council could approve acceptance of any one of the bids, with the following stipulations,” Walker said. “Then those stipulations could be taken back to the bidder and if they agreed to it, then the contract would be executed.”

Allsop acknowledged all the work and effort Lauve has put into saving the property. “I think we should give him a chance and take his offer,” Allsop said, making the motion to accept Lauve’s second bid of $31,072.13.

Without any support from fellow council members, Allsop’s motion died.

Kullis reiterated that McDonald’s bid was the only bid of the three that met all of council’s stipulations, and motioned to accept it.

“I would like to make a motion that we accept that bid with the addition that in six months if the requirements have not been met, that the property and surety bond will be forfeited back to the village,” Kullis said. Rankin seconded Kullis’ motion.

Bladzik reiterated his concerns regarding legal repercussions that could arise, should the owner not finish the work in the specified timeframe.

“I don’t want to see the village lose the title or the rights to this property until that six months is done,” Bladzik said. “I don’t know how it all works, but I want the village to be the legal owner until we are 100-percent satisfied within that six month timeframe because I’m concerned that even if we put things in place, if we transfer that title and someone else becomes the legal owner of that property, then we’re going to be chasing legal bills and going through the rigmarole in the case there isn’t the performance,” he added. “I don’t want to see this incur even more cost as a result, so if the bidder would be amenable to that, that’s the only way I could support this motion.”    

Bob Allsop

Allsop pointed out that if the village retained ownership of the property, it would be liable for any injuries that might occur during renovations.

Councilwoman Debra Musgrave also had her concerns before casting her vote, specifically with what happens if only a portion of the work is done. “I’m just a bit leary all the way around– we are a government entity, we are not in the business of giving away a contract, although I would love to see the place refurbished, if possible, but personally, I think it’s going to cost too much money.”

In a vote of 3-3, the motion failed with Bladzik, Musgrave and Allsop casting the dissenting votes.

Village Manager, Jerry Walker

“OK, so at this point, council, I have to ask, what do you want to do with the house?” Walker asked.  While issuing another RFP on the house was another option, Walker cautioned against it, saying that it would only extend the time to complete renovations on the house, should the village even receive any more bids.

“Essentially, you are in the process of walking away from a $55,000 cash outlay for the property,” he said.

After further discussion and rehashing of the facts, Musgrave made the motion to reconsider accepting McDonald’s bid, with support by Kullis.

In a vote of 5-1, council accepted McDonald’s bid with Bladzik casting the dissenting vote.


#1 HollyRes 2013-06-28 18:17
Good grief. I can see the writing on this wall already.
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#2 guest0412 2013-06-28 18:50
So then, the new owner will make it into apartments again?
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