Birmingham commission approves $5.2 million purchase agreement to preserve Community House

The Birmingham City Commission voted 5–0 on May 19 to approve a resolution authorizing a purchase agreement for 380 South Bates, commonly known as the Birmingham Community House, at a purchase price of $5,200,000 and a $100,000 earnest money deposit.

Kathleen Martone, who presented the agreement on behalf of the city and identified an affiliation with Mark Varnum, said the sale "will guarantee the preservation of the community house building and grounds, as well as the community events and programming that have been offered at the community House for the past century." The agreement includes fixtures and books and records related to operation, and preserves the name "Birmingham Community House," Martone said.

Why it matters: commissioners and residents described the Community House as an integral civic asset whose programs — including an early childhood center and a banquet/conference operation — serve many families. The commission said acquiring the property would prevent potential loss of the building to outside interests and provide a path for a city‑created nonprofit foundation to administer the site going forward.

Key terms and conditions: the purchase price is $5.2 million, with a $100,000 earnest money deposit due within five business days to be held by ATA National Title Group (Seaver Title Division). The agreement contemplates division of existing endowment funds; Martone said paragraph 24 calls for 50% of the then‑current endowment to be allocated to the City of Birmingham Community House Foundation and 50% to the continuing entity, with the city’s staff estimating a preliminary endowment figure of about $800,000 subject to verification through the included books and records. Martone told commissioners that if the Community Foundation for Southeast Michigan does not approve the proposed division, half of the escrowed endowment funds would be paid into a donor‑advised fund or similar vehicle.

Due diligence and court approval: Martone said the city has until 5 p.m. on June 15 to complete physical inspections, including building and environmental reviews, and the city may terminate during that due diligence period. She also stressed that the sale is subject to approval by the United States Bankruptcy Court; the city will file a motion for sale in the bankruptcy process if the purchase agreement is signed. "This is a step in the process," she said, noting closing requires court approval and satisfactory title and other standard conditions.

Residents’ concerns: during an extended public comment period, residents pressed for assurances about oversight, record preservation, use of sale proceeds, and continuity of programs and staff. "We need to have some kind of accounting, audits to make sure that it's properly being run because now we have taxpayer money, a lot of taxpayer money at stake," resident David Bloom said. Several parents of children enrolled at the early childhood center asked whether care would continue after May 29; officials said the city’s goal is continuity but could not guarantee there would be no lapse because state licensing and ownership changes add variables.

Budget impact: the city manager said the $5.2 million is proposed to come from the unassigned fund balance and that the city would remain within its reserve target range (the manager said reserves would fall from the upper limit into the mid–low 30 percent range, well above the 17 percent policy minimum).

Vote and next steps: Commissioner Cole moved to adopt the resolution and Commissioner Palmer seconded. The roll call vote recorded affirmative votes and the motion passed unanimously with five members voting yes (commissioners noted a prior recusal left five voting members present). Officials and outside counsel said the foundation formation, bylaws and filings with the attorney general are already being prepared so the new foundation can assume operations promptly if the sale closes. The agreement still requires bankruptcy court approval, issuance of a title commitment, resolution of any title objections, completion of due diligence, and a closing before ownership transfers.

The commission adjourned after the vote; officials said additional public updates will follow as the bankruptcy process and due diligence proceed.