Grant payback a hitch in Armory sale

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March 27, 2014

By Kristy Zurbrick, Madison Editor

The city of London could owe the state approximately $17,200 if it sells the Armory building on East Second Street.

For years, the city rented the Armory to non-profit groups for youth recreation pro-grams. Now that the city runs recreation programs in the community center on Walnut Street, it no longer needs the Armory. Two parties have submitted bids to purchase the property: a day care business and an individual affiliated with a church that has offered youth recreation at the Armory in the past.

In preparing to choose a buyer, city officials discovered a string attached to selling the property.

In 2007, the city improved the Armory’s roof using a $40,000 grant from the Ohio Cultural Facilities Commission. (The grant is now administered by the Ohio Facilities Construction Commission).

The grant required that the Armory be used for youth recreation purposes for 15 years from the time the roof work was finished. If that ceased to be the case within the 15-year window, the city would owe a pro-rated amount of the grant back to the commission.

City officials assumed they could sell the facility and not owe any grant payback as long as the buyer offered youth-related opportunities. In recent talks with the commission, London Law Director Zahid Siddiqi discovered that is not the case.

The commission says the city must have a “suitable replacement” for the Armory to avoid any grant payback. They rejected the Walnut Street community center as a replacement because it doesn’t meet additional grant criteria pertaining to the historical value of the building.

Unless the commission changes it decision, the city will owe the commission part of the grant proceeds. Because about half of the 15-year period has passed, the city will owe 43 percent of the original $40,000, which comes to about $17,200.

News that the commission rejected the community center as a replacement came on March 19, the day before council’s most recent meeting. Council President Pat Closser suggested that council take more time to decide its next step. He also apologized to the bidders for the drawn-out sales process.

London Parks and Recreation Director Ben McCoy suggested that council move forward with the sale, even if it means paying back the $17,200. He noted that the Armory costs the city $8,000 a year in utilities alone.

Council opted not to make a decision on the sale at the March 20 meeting. The issue will be back on the agenda at council’s next meeting at 6:30 p.m. April 3.

In the meantime, Siddiqi said he is researching the terms of two other grants the city received related to the Armory—a $100,000 Community Development Block Grant (CDBG) for various improvements and a $14,580 Nature Works grant for the city’s initial purchase of the Armory. He says he found no payback requirements with the CDBG grant and is still looking into the details of the Nature Works grant.

The original purchase price of the Armory was $138,500. The city has since put $170,000 worth of improvements into the building.

London council’s next meeting will take place at 6:30 p.m. April 3 in council chambers at 6 E. Second St.

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