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'A great deal': Mitchell City Council approves $1.5 million offer on Kelley home from anonymous buyer

“I think it’s a great deal. With the land we still have available and tillable, the grants and services we’ve had donated to our wetland project, you add it all together and we’ll be ahead,” Councilman Steve Rice said of the offer

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Shown here is the front entrance of the former Kelley house that city of Mitchell is selling.
Sam Fosness / Republic
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MITCHELL — A $1.5 million offer to buy the former Kelley house received the Mitchell City Council’s approval on Monday.

The person behind the purchase has chosen to remain anonymous at this time. However, Brian Eliason, a local realtor representing the buyer, told the Mitchell Republic that the individual who made the offer is a “solid local person with a huge interest in the lake and Mitchell.”

Eliason said the buyer plans to utilize the multimillion-dollar home as a wedding and event venue. Since it was built nearly two decades ago, the Kelley couple resided in the immaculate home that's equipped with a large pond, retractable roof and a multipurpose building near the property.

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Shown here is the back of the former Kelley house that city of Mitchell purchased in 2019.
Adam Thury / Mitchell Republic

While the home was listed at $2.2 million , the council unanimously backed the $1,590,000 offer that's about $600,000 below the latest asking price. The offer also stipulates adding a few more acres of land than the 8 acres that was included on the listing. The agreed upon offer will increase the land surrounding the home to about 16 acres.

“The first thing we made sure in our offer was that 100% of the sales of the home goes to Lake Mitchell improvements,” Eliason said.

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Although the offer of the home has been agreed upon by both parties – the city and buyer – City Attorney Justin Johnson said there are a few contingencies for the sale to go through. Granting a conditional use permit to allow the property to be used as a wedding and event venue is the most notable contingency the buyer is requiring from the city. Johnson noted it will take about two months to grant the conditional use permit and plat the additional land included in the offer. He anticipated the city will close on the sale of the home by September.

After sitting on the market for two years and footing the bills to maintain the property, Mayor Bob Everson said he is relieved the city is on its way to selling the property.

The city purchased the large home in 2019 as part of a $4.1 million deal that came with 371 acres of land for the city to build a wetland aimed at reducing the phosphorus and sediment flowing into Lake Mitchell from Firesteel Creek. Although Everson and city officials did not intend to buy the Kelley house for the wetland project, the former owner stipulated the 371 acres of land would only be sold with the house included.

For council member Steve Rice, the $1.5 million offer is a win. Rice pointed the more than $1 million in grant money the city received from purchasing the Kelley property, paired with the available land the city still owns adjacent to the home, as several key reasons he supports the offer to sell the property.

“I think it’s a great deal. With the land we still have available and tillable, the grants and services we’ve had donated to our wetland project, you add it all together and we’ll be ahead,” Rice said. “The fact that we got the wetland project out of it is still primary in my mind.”

Council member Jeff Smith highlighted that the city has over 100 acres of agricultural land and non-agricultural land from the initial purchase of the Kelley property available, which he said could be sold in the future.

Stratton Havlik, the real estate agent who listed the home on the market, noted the sale of the home is contingent on an inspection. If the buyer were to back out of the deal and breach the contract prior to the closing date, Havlik said the $100,000 earnest money would be retained by the city.

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Shown here is the front entrance of the former Kelley house that city of Mitchell purchased roughly two years ago as part of the wetland project to improve the lake water quality. (Sam Fosness / Republic)

When the city listed the 10,095-square-foot house in 2020, the price tag was $3.5 million. The property was listed for sale with Exit Realty, a local real estate company. Since then, the city has reduced the price of the home several times, with the latest price drop bringing the cost to $2.2 million.

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While being on the market over the past two years, the city received a roughly $1 million offer a few months after listing it for sale and had several interested parties tour the home. The city decided to decline the $1 million offer in 2020, as the house was listed at $3.5 million at that time.

The agreed upon offer on the home comes as interest rates have drastically hiked over the past few weeks.

Although the person behind the offer remains unknown at this time, Eliason said he anticipates the disclosure of the buyer in the near future. Putting an offer in with anonymity is a process that buyers can utilize when purchasing property.

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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