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

The Birmingham City Commission on May 19 voted 5–0 to authorize a purchase agreement for 380 South Bates, commonly called the Community House, approving a $5.2 million price and directing the city manager to pursue the steps necessary to keep the building and its programming operating during a transition of ownership.

Kathleen Marton, who presented the agreement for the city, said the sale would preserve the building, its grounds and the community programming that “have been offered at the community house for the past century.” She told commissioners the transaction arises from pending circuit-court litigation and a Chapter 11 bankruptcy filing by the Community House Association and that the city would be the sole member of a nonprofit foundation formed to maintain and administer the property.

Under the purchase agreement the city would pay $5,200,000 with a $100,000 earnest-money deposit due within five business days of the effective date; the agreement includes an exclusivity clause preventing the seller from soliciting competing offers after that date. The contract also requires the seller to deliver title commitments and permits the city until 5 p.m. on June 15 to complete physical and environmental inspections during a due-diligence period; the city may terminate within that period for specified breaches. Marton said the sale includes fixtures and historic sculptures on the property and all books and records related to operations.

The agreement contemplates a 50% division of the Community House’s endowment “of the then current value.” City staff estimated one side’s share at roughly $800,000 but emphasized that figure is an estimate subject to verification during due diligence and depends on the Community Foundation for Southeast Michigan’s approval of any division. Marton said the contract provides for a holdback into escrow and, if necessary, payment into a donor-advised fund if the Foundation does not implement the division as proposed.

Several residents asked detailed questions during public comment about governance, stewardship and continuity of services. “Are people going to be qualified?” asked David Bloom, warning that previous board negligence had harmed institutional oversight and urging audits and board training. Parents and staff raised immediate concerns about the Early Childhood Center: Adrien Kerry, an ECC parent, said care was scheduled to stop on May 29 and asked whether the city could prevent a lapse; officials said the city’s goal is to maintain ECC operations but could not guarantee there would be no interruption because state licensing and an ownership change impose separate requirements.

Officials said the city plans to form a city-controlled nonprofit foundation to be the property’s steward and will work concurrently to establish bylaws, seek attorney-general approval for the foundation, and recruit a board and leadership so the organization can “hit the ground running” if and when the purchase closes. City staff told residents the $5.2 million is proposed to come from the city’s unassigned fund balance and that the transfer would keep the fund balance within the city’s target range (moving from the upper limit into the mid-to-low 30 percent range).

Commissioner Cole moved to adopt the resolution authorizing the purchase and directing the manager to implement steps to keep the Community House operating and staffed during the ownership transition, including continuity of the child care facility. The motion was seconded (second not specified on the record), and a roll-call vote recorded Commissioners Host, Cole, Mayor Balor, Mayor Pro Tem Long and Commissioner Kazowski voting yes. The motion passed unanimously of the five members present.

Next steps include filing a sale motion under Section 363 with the U.S. Bankruptcy Court for the Eastern District of Michigan, satisfactory title and environmental reviews, and completion of due diligence. Officials cautioned the signature of the purchase agreement does not transfer ownership; closing remains contingent on bankruptcy-court approval and the fulfillment of contract conditions. The commission also said it will run the foundation-formation process in parallel so operations can begin promptly if closing occurs.

Residents urged transparency about how the remaining proceeds would be used and how a newly seeded foundation would be governed. Officials responded that the Community House Association’s board and its decisions are separate from city authority; the city’s control as sole member of the proposed foundation would permit the commission to set initial bylaws and remove directors if necessary.

The meeting concluded after procedural remarks and an adjournment vote.