The Galt City Council will consider buying a piece of property that was at the center of a costly lawsuit with the now-defunct Boys and Girls Club of Galt.
Even after settlement with the club, the city lost almost $140,000 in the controversy.
The council will consider at its meeting tonight whether to purchase 405 5th St., which is the former Jaycees building, for $40,000 from three private citizens.
The city first entered into an agreement with the Boys and Girls Club in 2006. The city paid the club $400,000 to develop and construct a new clubhouse at 405 5th St. and the adjacent 411 5th St. The clubhouse was never built.
In May 2009, the Boys and Girls Club sold the 405 5 St. property for $32,500 to three private citizens, which the council said proved the organization did not plan to build the clubhouse.
The city sued the organization in December 2009 in an attempt to recoup some of the funds. In the settlement, the city received $40,000 in cash and 411 5th St., which has two houses on it valued at around $261,578.
The council will decide tonight whether to buy the 405 5th St. property for $40,000 from Alfonso and Nohemi Quesada and Jose Alberto Vera.
The city approached the owners to see if they would be willing to sell the property, City Attorney Steve Rudolph said. Since the city already owns 411 5th St., it would give the city the whole corner to work with, he said.
The city could then request proposals for projects from private developers or nonprofits, build a city project or sell one or both of the properties on the market, he said.
"It would give us a site large enough to do a project on, like a park or affordable housing project," Rudolph said. "It would give us that flexibility."
But some of the council members are not sure if the city should buy the property, considering its controversial history.
If the city buys the property, it will most likely have to demolish the building or renovate it before selling, Councilwoman Barbara Payne said. "Is that a good investment? I'm really struggling with it. ... Do we want to keep pouring good money after bad?" she said.
She is leaning toward purchasing the property because she said it will give the city control of what goes on that corner, which is a few blocks from where the city is working to revitalize.
"Otherwise, I'm afraid what might happen," she said. "The owners of the Jaycee building might rent it, just to get some rent money back, and sometimes that is not very good."
Councilman Darryl Clare also said he does not know whether the city should purchase the property and will need to hear more information from staff before making a decision.
"This hasn't been clean. This hasn't been easy," he said. "Let's be careful."
If the council purchases the property, city staff is leaning toward requesting proposals from developers or nonprofits about projects that could go on that site, said Curt Campion, community development director.
The city has already received interest in the two homes at 411 5th St. from Habitat for Humanity and another nonprofit, Campion said.
"We are not in the development business; therefore, we should turn to those people and see what they think," he said.
Property owner Alfonso Quesada said if the city approves of the price, he is ready to sell it.
"All we got to do is sign the papers," he said.
The council meeting will be at 7 p.m. tonight in the council chambers at City Hall, 380 Civic Drive.
Sept. 1, 2004: Galt Junior Chamber of Commerce grants the 405 5th St. property to the Galt Boys and Girls Club. There is no transfer tax, so it must have been a donation.
Dec. 19, 2005: The club purchases the 411 5th St. property for $435,000 from Jose and Maria Angulo.
Sept. 22, 2006: The city and club sign the agreement to give $400,000 of the city’s money to the club to develop and construct a new clubhouse.
July 1, 2006, through June 30, 2007: The club pays off $405,630 in debt.
May 6, 2009: The club sells the 405 5th St. property for $32,500 to Alfonso and Nohemi Quesada, and Jose Alberto Vera.
May 12, 2009: City attorney Steve Rudolph sends a letter requesting that the Boys and Girls Club return the $400,000 by May 18.
June 12, 2009: The city files a lawsuit against the club after none of the money is returned.
June 23, 2009: The club officially gives up its charter.
Nov., 23 2009: City signs a settlement agreement with the club. The city received $40,000 in cash and 411 5th Street, which has two houses on it valued at around $261,578.
— News-Sentinel staff.