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City committee approves termination of Ideal Aerosmith purchase agreement, returns $100,000 earnest money
Summary
The Grand Forks Growth Fund Committee approved staff's recommendation to let Ideal Aerosmith terminate its purchase agreement after site testing failed to meet the company's needs; staff said the city will return $100,000 in earnest money and keep the property for resale.
The Growth Fund Committee voted to approve termination of a purchase agreement with Ideal Aerosmith after the company informed the city it could not meet the site's specific testing criteria.
Brooks, the city staffer who presented the item, said the company exercised an option in the purchase agreement to terminate and that the property never transferred to the buyer. "There is that $100,000 that's sitting in account with the title team, and that'll just be returned to them as with the recommended action that we have," Brooks said, recommending council approval of the termination.
Council members pressed staff about city time and expense devoted to the sale, asking whether the city should retain some of the earnest money to recoup sunk planning and staff costs. Brooks replied that some costs are sunk but that the sale price for similar lots has risen to roughly $5 per square foot, and staff had delayed plat recording while the buyer completed testing.
Committee member (functional_label) asked if the city has contractual protections that would recover staff time after repeated buyer withdrawals. Brooks said the city has some protections but acknowledged staff time is a sunk cost in these transactions. Dan Gostad, who assisted with drafting the purchase agreement, said his role took "probably not more than a couple hours to draft" the document.
After discussion, a member moved approval and the motion passed unanimously.
The committee's action returns the parcel to city control; staff said they will hold the property and seek another buyer rather than record a plat while negotiations continue.
