County backs away from buying former federal building for now

The Cape Girardeau County Commission has officially ended negotiations that never really got started with the new owner of the former federal building on Broadway. Meanwhile, the federal government agency that unloaded it has admitted to major missteps in the way the sale was handled.

The commission voted unanimously Thursday to "cut off all negotiations at this time due to the lack of response from the current owner," according to minutes from the closed-session meeting that were provided to the Southeast Missourian in response to a Sunshine Law request.

But the 150 pages in closed meeting minutes that dates back to 2009 also tells the story of the county's frequent attempts over the years to buy the building, with offers that ranged from $1 to $1.2 million and that, in fact, a deal was in place at one point for the county to own it. But those all fell through, only to have the agency ultimately sell the building in February to someone else for $325,015.

The documents also helped shed light on Presiding Commissioner Clint Tracy's calculated gamble to stop bidding during a second online auction with hopes of buying the building from its new owner, RDRH Holdings of Austin, Texas. Tracy has been designated by his fellow commissioners to act as the negotiator and was authorized to bid up to $750,000, but stopped bidding at $300,000.

But Tracy's plan fell apart when company president Majid Hemmasi failed to return frequent phone calls from Tracy in the weeks after the sale was finalized, prompting the commission to end negotiations that essentially never happened.

"In hindsight, it is what it is," Tracy said. "You can't change it. ... You can criticize my decision to stop bidding at $300,000 but, at the end of the day, we didn't spend any taxpayer money on the building. It was done in the spirit of trying to be fiscally responsible and I'm willing to defend that argument that we're trying to be as frugal as we can."

Meanwhile, the GSA has also admitted that the way the Cape Girardeau building was sold was not well handled. The GSA is under national scrutiny for the $832,000 it spent for a lavish training session near Las Vegas that featured a mind reader, bicycle giveaways and after-hour receptions in resort suites for federal workers.

According to transcripts, U.S. Rep. Jo Ann Emerson, R-Cape Girardeau, grilled former GSA chief Martha Johnson on March 27 during a House committee hearing just days before Johnson resigned. Emerson took the opportunity to ask Johnson specifically about the way the federal building situation in Cape Girardeau was handled.

"We have made some mistakes in the disposal of the Cape Girardeau courthouse," Johnson told Emerson. "We have certainly -- what is the expression? -- eaten some crow."

Later in the hearing, Robert A. Peck, who was then the GSA's public buildings commissioner, also weighed in under direct questioning from Emerson. Peck also has since been fired from his post in light of the scandal. Peck told Emerson that the initial decision about whether to conclude a sale with the county was made before the current GSA regional administrator in Springfield, Mo., was hired.

"So when we started down the path, it became awfully convoluted and it did not end in a good result," Peck said. "It was done before he got there and I will tell you this: This is a case study which we are spreading around the GSA to talk about how not to make certain decisions about our property disposals."

Emerson, a frequent GSA critic, offered her thoughts about the way the GSA handled the sale again Tuesday. As chairwoman of the House subcommittee on financial services and general government, Emerson cut $1.6 billion last year from the president's budget request for the GSA.

The way the county was treated "was an outrage," Emerson said. "It was an outrage from the beginning to the end. ... It was just one mishap after another and it was quite inexcusable. The whole process was flawed from beginning to end."

The county has been interested in buying the former federal building since 2005 after it was learned a new federal courthouse was to be built. The county has intentions of building a new consolidated courthouse in Jackson. Buying the former federal building in Cape Girardeau was to serve as a stopgap measure to relocate certain county offices from the outdated Common Pleas Courthouse.

After the federal building went up for sale, the GSA and the county actually reached an agreement that would allow the county to buy it for $1.27 million. But then a lawsuit was filed by the Rev. Larry Rice, who wanted to convert the building into a homeless shelter. That stalled the plan until the courts ruled Rice couldn't have it.

In the meantime, county officials came to believe that the building wasn't worth that much, one factor being that they would likely have to sink $1 million to upgrade the building. The county lowered its price to about $900,000 at that point, but the economy had soured and commissioners weren't sure that was a reliable market value.

They then entered a partnership with Cape Girardeau officials to buy the building and share space and the building could serve as a future city hall once the county vacated the building to move into the new courthouse. But closed-session minutes from a meeting last year show that the city became frustrated about how the space would be divided and they eventually dropped out of the partnership.

The county then made an offer of $300,000, Tracy said, arguing that taxpayers already paid to have the building built and shouldn't get gouged by essentially paying for it twice. Using that same logic, Tracy even tried to ask the GSA to get Congressional approval to sell the building for $1, which made sense to him he said because it would be transferring a government property from one government agency to another.

The county then made an offer of $750,000, an amount that Tracy's instinct told him was too high. The GSA responded that it didn't think the county was taking the negotiations seriously enough. So the GSA took the sale to online auction. The county offered more than $450,000 during that first auction, which made it the third-highest bidder. Even after the top bidders backed out, the GSA asked the commissioners to up their offer to $750,000, which Tracy was reluctant to do now that he felt the market had dictated the selling price.

The GSA took the issue back to auction a second time and Tracy stopped bidding at $300,000. He believed the county's incrementally higher bids were artificially increasing the perceived value of the building. He also had previously received a call from the president of the company in Texas that eventually bought the building and Tracy hoped he could buy the building from him. If the county continued to bid, that would continue to drive up the price, Tracy said. The GSA's track record, Tracy said, didn't leave him optimistic that the county would ever be able to buy the building for a fair price from the federal government.

Tracy said that since the GSA had rejected so many of their previous offers that were higher, he never thought the agency would let it go for $325,000. But it did.

Now, the commission is planning to move forward, hopeful that perhaps RDRH Holdings will contact the county. But if the company doesn't, the commission will figure something else out, Tracy said.

"I probably wouldn't have approached the negotiations like that," Commissioner Jay Purcell said of Tracy's decision to stop bidding during the second online auction. "But I'm not going to Monday morning quarterback Clint's decision. ... So we'll wait and see. I'm disappointed about it. I think we should have gotten it. It just didn't work out that way."

The GSA declined to comment Tuesday on the issue and calls to RDRH Holdings company president Majid Hemmasi went unreturned.

smoyers@semissourian.com

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Pertinent address:

1 Barton Square, Jackson, MO

339 Broadway, Cape Girardeau, MO