Copyright © 2021 Roswell Daily Record
Copyright © 2021 Roswell Daily Record
Different type of lease with Ergon Asphalt is under consideration
A decision about the sale of Roswell Air Center property to a Mississippi-based company has been postponed by Roswell city councilors to give the city manager time to discuss the alternative of a long-term lease with the potential buyer.
The Roswell City Council voted 6-4 Thursday night to delay the vote on the sale of about 13.4 acres of land to Ergon Asphalt and Emulsions Inc. The sale agreement and a related deal about maintenance of city-owned rail spurs on the property are now due to be considered at a scheduled Nov. 12 City Council meeting.
The decision followed a campaign against the deal led by a few local business people, some of whom have spoken publicly at meetings about their opposition to the sale of what they call prime industrial land at the Air Center. They encouraged others in the city who had questions or concerns to call city councilors to ask for reconsideration.
Mayor Dennis Kintigh, who cannot vote except to break ties, urged councilors not to delay if they were determined never to approve a sale.
“I would encourage council not to postpone action,” he said. “I think it is important for the community, for the company and for staff to understand if the governing body is opposed to a sale. If this is not an option to be pursued, then the staff in particular needs to understand that. We owe it to them to provide that clarity. So if you would not under any reasonable circumstance consider a sale, then let’s say that.”
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The councilors voting for the delay were George Peterson, Jason Perry, Angela Moore, Juan Oropesa, Judy Stubbs and Jacob Roebuck. Those voting against postponement were Margaret Kennard, Jeanine Best, Barry Foster and Savino Sanchez.
Several city councilors who voted for the delay said that they wanted City Manager Joe Neeb to determine if an agreement could be reached about a long-term lease, which could be for terms of 15 or more years. Neeb explained that Ergon was the party that initiated sale discussions about three years ago. He also acknowledged after Roswell resident Will Cavin addressed the City Council that Ergon Vice President Drew Brooks had indicated several times in recent days that his company might be open to a long-term lease instead.
Councilor Jason Perry said he thought that a month to explore a long-term lease would not put a deal at risk or mean an unreasonable delay.
“From my conversation that I had with city staff and the mayor and Ergon, I did not feel pressure from Ergon to jump into anything quickly,” Perry said. “Ergon was very gracious, Drew was very gracious, to say for the city to decide which direction they want to go and let them know. He seemed amenable either way we looked into this consideration. With that being said, I don’t believe it will hurt the process at all. I don’t believe we will have to go back to square one if we postpone this vote.”
City Attorney Parker Patterson confirmed that the City Council can proceed with votes on the two agreements in November, having met its legal requirement for a public hearing on Thursday.
Ergon Asphalt, which has about 60 locations in U.S. and Mexico, has leased the property that faces East Martin Street and is near Earl Cummings Loop since it purchased the assets and equipment of Western Emulsions in 2016. It pays $1,030 a month on a lease due to expire in 2028.
Ergon Asphalt has said that it wants to expand its local operations, including by installing a new storage tanker and making site improvements at a cost of about $2 million. With its expansion, the company has said that it might be able to add one or two more employees to add to the current staff of six.
The initial appraisal on the land put it at $340,000, which is the purchase price Ergon Asphalt has offered. But Bud Kunkel, a retired appraiser and one of the business people who urged people who opposed the sale to speak out, said the city needed a second appraisal to add the value of the rail spurs. That second appraisal put the value at $430,000.
Ergon didn’t raise its purchase offer, but it also pointed to a lot of other investments it was willing to make. The company offered to pay about $350,000 to create a new road to give access to Earl Cummings Loop so that it can close the portion of Airport Avenue near its property that crosses over the rail spurs. It also planned to spend about $75,000 to plant trees and install irrigation so that a buffer would be between the site and the nearby residential area. In addition, it agreed to pay $20,000 a year for the rail spur maintenance instead of the current $5,000 a year.
Councilor Peterson, who has opposed the sale since it was first made public in April, said the investments do not make up the $90,000 difference between the purchase offer and the second appraisal value. He also has several other concerns, including what expanded business might mean for air quality for nearby residents. Neeb said he is not aware of any complaints about the business in his three years with the city.
In contrast to Peterson’s views, Councilor Barry Foster lamented that the transaction had become a “political ball” for some reason.
“That’s what I really get disgusted with,” he said. He explained that some of the same people speaking against the current sale were advocates of a December 2016 sale of 9 acres at the Roswell Air Center. Tulip Development LLC, an investment group based in Texas, had announced plans to build a hotel and an apartment complex on the parcel. The land remains undeveloped.
Foster added, “If we do a long-term lease, the city has a lot of money we have to invest out of there.”
He also said there is no guarantee that the company would stay for the entire lease term.
Neeb confirmed that Ergon probably would not pay for landscaping if it leases the land, and that payment for the construction of the new road would have to be renegotiated.
Kunkel said after the vote that he considers a long-term lease with appropriate rental rates that reflect the appraised value of the parcel will be the ideal situation for both taxpayers and the company.
“We want them here,” Kunkel said. “We just don’t think it is good for the taxpayers to sell the property.”
He said the sale of the property for the hotel is not comparable to the sale of the Ergon site because the hotel land cannot be used for industrial purposes, as it is next to the Sidney Guiterrez charter school and the International Law Enforcement Academy. Kunkel said the Ergon site, an industrial property with two rail spurs, is especially valuable to the Air Center.
Brooks of Ergon Asphalt did not respond by press time to requests for comment.
Senior Writer Lisa Dunlap can be reached at 575-622-7710, ext. 351, or at email@example.com.