Lynn property bid hits snarl: Clinic lease jeopardizes $450G offer

By David Liscio -- The Daily Item
Wednesday, October 22, 2003
 

David Shum, who owns several commercial properties in the downtown business district, was high bidder for 232-256 Union St. as the City Council's Public Property Committee opened a stack of sealed envelopes. The nearest bid was $91,000 lower.

Although the committee previously announced that all public properties on its list would be sold to the high bidder, with the exception of abutters, the offer presented to Shum at the meeting was not the same as that advertised in a legal notice. After all, the notice did not stipulate the buyer would be required to house the existing Lynn Community Health Center's dental clinic at least through 2006, and perhaps through 2011, at its current rent of $1 per month.

Public Property Committee member Timothy Phelan recommended the committee tentatively accept the high bid pending further discussion between Shum and Lori Berry, the Lynn health center's executive director.

Assistant City Solicitor George Markopoulos clarified that Shum would not be allowed to resubmit a lower bid even if he were to reach an agreement with the dental clinic.

Public Property Committee Chairman Richard Colucci, Phelan, and member William Trahant Jr. voted to give Shum 30 days to make his business plan workable while still accommodating the clinic. Committee member Charles O'Brien cast the dissenting vote.

The committee voted not to reject the other bids for the Union Street property, but a few withdrew their offers in the wake of the dental clinic impasse.

Councilor-at-large Deborah Smith Walsh, a non-voting member of the committee, defended the dental clinic and the committee's requirement, noting that the Lynn Community Health Center would not have invested $232,000 in state funds into the building if the City Council had not given the impression that the address would be available for 10 years at nominal rent.

Others were less enthralled. Bibby challenged Berry's argument that the clinic's investment makes the property worth that much more, dollar for dollar. He stressed that the clinic's specialized equipment and interior layout does not enhance the property's value as a general retail site, adding that a private doctor renting the storefront would not expect the landlord to pay for such improvements.

Lynn Chamber of Commerce Executive Director Kevin Donahue, who favors an open auction process rather than the solicitation of sealed bids, said the committee should not have put the would-be investors on-the-spot regarding their plans for the clinic.

"That's why an auction is better. It takes a lot of the after-the-fact negotiating out of the picture," Donahue said. "Lots of people took this seriously by spending time and money to prepare, and then you end up with a situation like this. If Mr. Shum and the health center can't come to terms, the city could be looking at the loss of a potential $450,000. That's five firefighters or five police officers at a time when the city is scraping for bucks."

Donahue said the city of Salem brought in $1.5 million through auction of its unwanted public properties, twice the original estimate that its city officials projected through sealed bids. "In Topsfield, their auction brought in three times the amount anticipated," he said. "Besides, an open auction keeps everything clean."

Tuesday's meeting marked the committee's first attempt at selling public properties, most of which are tax delinquent. The effort brought in thousands of dollars, presuming the committee's recommendations are endorsed by the entire City Council.

Among other properties for which six-figure bids were accepted Tuesday were: 50 High St., for $171,770 to Jonathan Bedard; and 49 Vine St., for $133,700 to Devon Simpson.

"It's a great day for the Lynn taxpayers," said Colucci, referring to the accepted bids and projected windfall. "Those properties were just sitting there, not bringing in a dime. Now they'll be back on the tax rolls."

Phelan described the dental clinic as a "unique situation" that can be resolved. "It's a work in progress," he said.

According to Berry, a recent survey showed Lynn residents need dental care more than other health-related services, and that 9,000 patients received services last year. Colucci earlier this week suggested each patient pay $2 per visit, which would amount to $18,000 that might be used toward rent, but Berry explained Tuesday that state regulations prevent the clinic from accepting payment from patients below certain income levels.

 _________________________________________________________________