Malepsy explains Shady Cove land purchase

Mike Malepsy, a 30-year resident of Shady Cove and real estate broker, made a presentation to the Shady Cove City Council at their Feb. 19 meeting on the history of 24+ acres now known as Flywater LLC. Issues have been raised by Shady Cove residents Jane Hagan and Bud Rees who have said they wish “to void the sale and allow other developers the opportunity to negotiate for this 24 acres.”  They have sited the lack of a public hearing in the process which involved ODOT, the City of Shady Cove and Flywater.

The city first talked to ODOT about purchasing the Brophy Road property some 15 years ago, but ODOT wanted more than the city could afford. ODOT took it off the market for sometime. In 2007-08 they revisited selling a number of their properties, including the 24 acres.
Malepsy said he became aware of the state’s plan to sell the property and talked to the city. Again, they had no funds.

Malepsy said he asked to make a proposal to the council in a special meeting. (Executive sessions are permissible for discussion of real estate transactions.)  “I would, at no expense to the city, put up the funds to purchase the property. I would then enter into an agreement to build a park and donate to the city over time, with a possibility of a maintenance fund provided by a percentage of future sales,” said Malepsy.

Malepsy said City Administrator Elize Smurzynski said she would talk to council members and  City Attorney Steve Richard and if there was interest, she would talk to ODOT.  And, ODOT was willing to participate in the sale. ODOT had the property appraised and the price was $575,000.

According to Malepsy, the council and city attorney agree on three points in the transaction:

  • That Malepsy would take title through a negotiated agreement.
  • That he would transfer the developed park land to the city
  • That there would be a future maintenance fund.

The buyer (Flywater) will contribute up to $200,000 which will include the cost of utilities and improvements toward development of the park, Malepsy told those present Feb. 19.  That would be given by Dec. 31, 2011 or when 50 percent of the property has been sold.

Malepsy said he has applied for a partition to separate the county property from the city property and then partition the park property. That parcel has been appealed by Hagan and Rees.

Flywater LLC is a partnership with Bob Kolodny, a lawyer from San Diego, his wife, Malepsy and his wife. They have done business together for a number of years.

Kolodny told this reporter he finds it unconscionable that somebody would question a process involving Malepsy.

Hagan and Rees do not believe that the proper process was followed in the real estate transaction and they cite ORS 221.725, which says …”when a city council considers it necessary or convenient to sell real property or any interest therein the city council shall publish a notice of the opposed sale in a newspaper of general circulation in the city, and shall hold a public hearing concerning the sale prior to the sale..”

The Independent did not contact the city’s attorney, but Malepsy and Kolodny each told this reporter that the city attorney was involved through the entire process, advising the city on all legal aspects of the transaction. Mayor Ron Holthusen said he and Rich had been in conversation and if the proper process was not followed, Rich indicated there was nothing intentional involved.
By Nancy Leonard
Of the Independent

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