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Council declines option to buy back former Casey's lot, hoping for donation

"We did that once, and it didn’t work out,” Sabers said, casting the lone vote deny the sale and go the route of the city buying the lot back from Doerr for $20,000 to redevelop it the “right way.”

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The former Casey's General Store location on the northwest corner of Seventh Avenue and Main Street in Mitchell is pictured on July 1, 2021. (Marcus Traxler / Republic)

A controversial bare lot on Mitchell's Main Street will be sold in hopes that the profits will be given to the city of Mitchell.

The Mitchell City Council on Tuesday night voted 7-1 to decline the right of first refusal, meaning the parking lot that formerly housed a Casey's convenience store near the Corn Palace will be sold from owner Matt Doerr to CJG Properties (Jeremy and Christie Gunkel, Mitchell residents and local business owners) for $20,000.

Doerr profited over $19,000 from the sale since he purchased the downtown lot roughly two years ago for $900.80.

That didn’t sit well with Councilman Dan Sabers, who initially made a motion for the city to purchase the property. That motion died for a lack of a second. He made the lone vote against declining the right of first refusal. He suggested the city -- which received the lot and then handed it over to the Mitchell Area Development Corporation -- already trusted Doerr's promise to develop the land.

“We did that once, and it didn’t work out,” Sabers said, casting the lone vote deny the sale and go the route of the city buying the lot back from Doerr for $20,000 to redevelop the “right way.”

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However, Doerr is seeking to reach a compromise by offering to donate “all of the profit” made from the sale back to the city of Mitchell, according to Geri Beck, CEO of the MADC and Mitchell Area Chamber of Commerce. It was made clear during the meeting that there is no way to hold Doerr to his promise to donate profits, according to City Attorney Justin Johnson.

At the time Doerr purchased the lot, Mark Vaux was the CEO of the MADC and Mitchell Area Chamber of Commerce. Vaux resigned in 2020.

While Beck said the MADC encouraged Doerr to give the property back to the MADC recently, she said Doerr’s proposing to donate the profits to the city’s downtown streetscape plan if the council approves the sale to the Gunkels. If the council decided to exercise its right of first refusal and buy the property for $20,000, she said Doerr proposed to donate the profits to two charities in Mitchell of his choice.

“Matt has shared that if the lot goes through to Gunkels he would donate it to the city, designating it to the Main Street Streetscape plan. If it doesn’t he would donate to two charities in the community of his choice,” Beck said of Doerr’s proposal, who did not attend the meeting Tuesday night.

Doerr purchased the property from the Mitchell Area Development Corporation (MADC) roughly two years ago for $900.80, which was a move that sparked criticism from some downtown business owners and community members since it was valued at $25,750 at the time of the sale.

Prior to Doerr’s purchase of the former Casey’s lot, located at 701 N. Main St., the city of Mitchell acquired it from Casey’s General Store. Shortly after acquiring the property, the City Council approved transferring the lot to the MADC for $1 to allow the organization to get it redeveloped. The MADC decided to sell the lot to Doerr for $900.80 and allow him to move forward with his plans he had for the property at the time he bought it, which entailed building a boutique on the lot. But those plans have yet to materialize due to what Doerr previously said was due to the economic uncertainty amid COVID-19.

Doerr was the treasurer of the Mitchell Area Chamber of Commerce board at the time he purchased the property two years ago, adding more frustrations among the council, as some cited conflict of interest.

Beck informed the council that Doerr earlier Tuesday resigned from his position on the Mitchell Area Chamber of Commerce board.

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“The lot was transferred to the city to the MADC for $1, and as a charitable nonprofit, our job is to help small businesses grow and develop. That was the intent with the lot. But if it would have been developed as we were led to believe, we wouldn’t be here this evening talking about this,” Beck said.

Beck assured the council the MADC won’t make the same mistake again.

“We won’t make this mistake again, and we hope it never occurs again in the future,” she said.

When Doerr bought the lot two years ago, it came with a handful of covenants and restrictions that were established by Casey’s General Store, mainly the stipulation that the property can’t house a business that would directly compete with Casey’s for the next 15 years, including selling food or convenience store items.

As part of a stipulation of the special warranty deed, the city has the “reoccuring right of first refusal,” on the sale of the property. According to City Attorney Justin Johnson, if the council denied Doerr’s request to sell the property to CJG Properties LLC (Jeremy Gunkel, a Mitchell resident) for $20,000, the city had the option to purchase the property back from Doerr at a cost of $20,000. However, the council’s decision to not purchase the property from Doerr, the proposed $20,000 sale with CJG Properties will move forward by July 31, according to the council agenda, which also noted “the city cannot stop the sale of the property.”

“It continues until we either purchase the property or give up our rights to refusal,” Johnson said of the first right to refusal.

Doug Altman, a Mitchell resident, criticized the sale of the property being sold for $900.80 two years ago, noting it was worth “way more than that” at the time. Altman offered to buy the property for the recent appraised value, which amounts to a little over $25,000.

“Anybody in a heartbeat would give the appraised value of $25,700," he said. "I would myself, but why should anybody be compensated or given a good deal when you're dealing with the city’s money? The city shouldn’t have got into this, but they did. It’s worth way more than $20,000, and I’m willing to give way more than $20,000.”

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Despite Altman’s offer, the council moved forward with declining its option, essentially allowing the proposed sale to the Gunkels to continue.

For Councilman Marty Barington, buying the property back would be another mistake by getting the city involved in the real estate business.

After the proposal of the lot sale was made public on the agenda on Thursday, last week, Council Vice President Dan Allen said he was opposed to the entire proposal to sell the lot for $20,000, including the option for the city to acquire it back. For Allen, the events that have unfolded at the Main Street were a “black eye” for the MADC. Allen was unable to attend Tuesday’s meeting due to a family death.

Sam Fosness joined the Mitchell Republic in May 2018. He was raised in Mitchell, S.D., and graduated from Mitchell High School. He continued his education at the University of South Dakota in Vermillion, where he graduated in 2020 with a bachelor’s degree in journalism and a minor in English. During his time in college, Fosness worked as a news and sports reporter for The Volante newspaper.
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