Commission approves sale of 601 Commercial Drive to Herington Rural Emergency Hospital LLC with clawback provision
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Summary
The commission authorized a purchase agreement selling Lots 1 and 2 at 601 Commercial Drive to a rural hospital group (organized as Herington Rural Emergency Hospital LLC), including a clawback provision that allows the city to reclaim the property if development stalls.
The Herington City Commission approved a purchase agreement to sell Lots 1 and 2 at 601 Commercial Drive to a hospital development group that has formed Herington Rural Emergency Hospital LLC.
City staff said the contract largely mirrors a prior lot sale and includes a modified clawback period: if the buyer has not reached agreed development milestones by May 20, 2027, the city can pursue damages of $25,000 and potentially retake the lot to prevent speculative holding. Staff said the city is selling the lot for a nominal sum because the commission’s objective is to see the property developed into a hospital.
Staff also said the hospital group has made progress on state authorization and on environmental and architectural studies and that the LLC has been formed. The city asked the group to provide a timeline of remaining milestones; staff said they will request a more formal timeline from the buyer.
A motion to approve the purchase agreement and authorize the mayor’s signature passed with recorded ayes from the commission.