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Hoover delays decision on sale of 3021 Lorna Road after council questions earnest money
Summary
Council continued consideration of a letter of intent to sell 3021 Lorna Road after members expressed concern that the buyer's $5,000 earnest-money deposit was below market; staff proposed options including raising escrow to $20,000 or a 48-hour break clause.
Hoover City Council voted to continue action on a proposed letter of intent to sell city-owned property at 3021 Lorna Road after councilors raised concerns about the buyer's proposed earnest-money deposit.
The attorney read the proposed resolution authorizing a letter of intent for the sale. Several councilors questioned the $5,000 earnest-money amount, calling it lower than market. One councilor observed that industry standard for commercial earnest money is typically 1%–3% of the asking price and suggested that even on the low end that could be about $19,000. Legal staff summarized options discussed in work session: increase earnest money or include a 48-hour break clause that would allow the city to accept a better third-party offer if one arises.
Legal counsel recommended the council defer action so staff could return with a "cleaner" letter of intent reflecting council preferences. At the meeting a motion to continue the resolution to the next council meeting was made, seconded and approved.
Councilors also discussed a rough estimate that increased ad valorem tax from the prospective buyer would be approximately $55,000 per year if the project proceeds, noting that the purchaser plans to invest in the property. The council took no final action on the sale and asked staff to return with negotiated terms.
