Fennville seeks to buy parking lot they already own

Fennville City Administrator Kathryn Beemer asked commissioners on Monday, Nov. 21, why the city bought a former bank building in 2019 for its new city hall.
“To save the parking lot,” some commissioners answered in unison, repeating the years-old mantra of why the city moved to the location at 125 S. Maple St. and even turned away a proposal from a private business to locate in the building.
As it turns out, the city already owned that parking lot, having actually bought it 25 years earlier, a fact that did not come out in 2019.
Beemer announced the finding amid an extensive audit of city records due to a multitude of accounting errors and the recent revelations of two other long-term property ownership issues.
“We should be glad about putting things right,” said Commissioner Dennis Martin about the rigorous investigation into procedures and finances.
The parking lot
The property at 125 S. Maple St. – what is now city hall – was a bank that closed in 2017. The building is 4,716 square feet with a parking lot of about 40 spaces. Those parking spaces used by many downtown businesses were a driving force behind the city’s desire to acquire the property. A private owner could have closed off the lot to general use, creating problems for city center merchants, some commissioners reasoned.
“Growth is going to require parking,” one commissioner said at the time.
“If we get that parking lot, we can start working on the back sides of those businesses,” another commission member said in 2019.
In 2022, as part of an extensive audit of city finances due to multiple accounting and banking errors as well as security snafus, the city began examining its assets. During the complicated process, Beemer discovered the city actually purchased the parking lot from the bank in 1994 for $8,000.
The splitting of the bank parcel into two lots – the parking spaces and the bank itself – and the subsequent purchase of the parking area by the city in 1994 was not properly recorded at the Allegan County level or at the local assessing level, according to Beemer.
On March 4, 2019, the city, in a 4-3 vote, decided to purchase the property for $110,000. Of the three who opposed the purchase, Commissioner Jim Hayden is the only one remaining on the commission. Shawn Machan is the only commissioner remaining who supported the purchase.
Neither openly speculated if knowing the city already owned the parking lot would have changed the vote.
After the city purchased the property, commissioners found out a Fennville resident with an established store in Benton Harbor specializing in cowboy boots bid on the bank building at the same time the city did. After the city acquired the land, that resident asked to either rent the former bank property from the city or buy it. On Oct. 21, 2019, the city voted not sell or rent the former bank to the business person and instead make it city hall.
The city also planned to split the building and parking lot into two parcels, though in April 2020, the idea was abandoned because the administrator at the time said it would be too expensive.
The deed showing the City of Fennville, not the DDA, bought land for $7,200 in 2011.
Other property issues
At the Nov. 21 meeting, the commission had to act on another property issue. Commissioners unanimously authorized Mayor Dan Rastall to sign over 220 E. Main St.– known as the 220 Building – to the owners of Las Brazas Tortilla Factory, 204 E. Main St., who offered to purchase the site for $180,000.
The city had thought the building was owned by the Fennville Downtown Development Authority. However, the city recently discovered the DDA did not own the building after all.
“Unfortunately, due to an accounting error, the DDA was not listed on the deed, and the city was,” wrote Beemer in a memo to the commission.
The $7,200 used to buy the building in 2011 from the Allegan County Treasurer was mistakenly taken from the city’s general fund, not DDA accounts as believed.
The money from the sale of the building will go to the DDA because it approved the purchase and repaired the building, Beemer wrote.
“The DDA has agreed to repay the general fund for this error out the profits of the building, but for the sake of propriety, attorney (Dan) Martin has advised that the city commission should officially accept the purchase offer as well, and direct Mayor Rastall to sign the title work,” Beemer wrote.
Dan Martin is an attorney with Thrun Law Firm PC.
Money from the sale will also be used to pay the city $84,528 left on a lease for a parking lot area on Main Street. The city had been working under the assumption the land, bought in 2004 for $303,000, was owned by the DDA and purchased with a loan from the city. That was not the case.
The city is the owner of the land all along and leased it to the DDA.
The $84,528 will be put in the city’s water fund where it was originally drawn from to buy the land.