Monroe rejects $9.6M offer; Wal-Mart a factor

Published 11:08 pm Friday, October 9, 2009

MONROE — City leaders this week walked away from a $9.6 million offer to sell vacant land because of Wal-Mart’s specter.

Last month, a well-regarded Seattle developer wanted to buy a hunk of property from the city. The developer planned to bring in a big-box retailer, such as a Wal-Mart, Costco or Target.

To some, that was good news. Sale and development of the land might create jobs and grow sales tax revenue — both important for the cash-strapped city.

More immediately, the sale would have helped Monroe pay off a large debt the city has that, if unattended, eventually could wound city services.

During a Tuesday vote, however, the council rejected the plan by 4-2.

Councilmen Mitch Ruth, Kurt Goering, John Stima and Geoffrey Thomas voted against the plan. Councilwoman Margie Rodriguez and Councilman David Kennedy supported it. Councilman Tony Balk was absent, and Mayor Donnetta Walser votes only to settle a tie.

Some said they felt rushed into a decision. Others said they were concerned the developer, Sabey Corp., planned to bring Wal-Mart to town.

The council’s decision could derail negotiations with Sabey and force the city to develop a marketing plan for the land, according to Hiller West, Monroe’s community development director.

“The overall feeling was that the offer from Sabey was a final offer,” West said.

In June, Sabey first pitched a plan to develop the land for a major retailer.

On Sept. 29, Sabey gave the city a letter of intent to buy the land for $9.6 million. If the council approved the letter, negotiations could have moved forward on the sale.

During those negotiations, either party could have put requirements on the deal, West said.

In theory, the city could have said it didn’t want a store that fit Wal-Mart’s description. If Sabey objected, the developer could have walked away.

The letter of intent did not bind the city, West said.

“In fact,” he said, “there’s a sentence that says the letter isn’t binding.”

Jim Kneeland, a spokesman for Sabey, said the corporation had no agreement with Wal-Mart. The retailer with the best offer would have wound up at the address.

Kneeland questioned the council’s attempt to pick and choose among big-box stores and said the ball is in Monroe’s court.

“It’s a top-dollar offer for the site,” he said. “We don’t see where there can be any kind of revisions. Clearly we’re not going to offer any more money for it. It’s really up to them.”

The sale itself, focused on 24 acres at the intersection of Chain Lake Road and North Kelsey Street, would have given the city much-needed cash.

Monroe owes $11.2 million on property along North Kelsey that it purchased from Snohomish County.

Money from Sabey’s purchase would have paid down that debt, which has resulted in $1.1 million in interest payments so far, according to Carol Grey, Monroe’s finance director.

The city draws on a special fund to make those interest payments. However, the special fund may run dry in 2011, Grey said.

When the special fund empties out, the city will need to make payments out of its general fund, which covers the budgets for the police and city parks, Grey said.

The council’s decision could wind up playing a role in the Nov. 3 general election, since two incumbents are at odds with their challengers on the issue.

Three days after the vote, Mayor Walser still sounded stricken by the council’s choice.

“What’s frustrating is there are not developers out there who have the financial wherewithal to do this,” said Walser, who is seeking a third term. “They’re offering cash.”

Her opponent, former City Councilman Robert Zimmerman, said he wasn’t opposed to Wal-Mart. He noted he wasn’t a part of closed-door sessions on the sale, but said the council was being hurried into its decision.

“The council did right in slowing the process down,” he said.

Councilman Goering said his goal in voting against the agreement was to give the city more time to consider what it wanted to do.

Monroe should still try to negotiate with Sabey, he said.

“If Sabey really walks away, then we’ll know it was Wal-Mart all along,” he said.

Goering’s opponent, Chamber of Commerce president Katy Woods, said the council should have signed the letter and then addressed concerns over Wal-Mart.

“The letter of intent still gave the city control over the site plan, and they could still make changes,” Woods said. “It was a letter.”