The argument between Somerset resident Jay McShurley and Mayor Alan Keck over the potential land deal between the city and the University of Somerset may come down to one thing: Semantics.
At Monday’s City Council meeting, McShurley admitted to council members that it wasn’t the university itself he objected to. It was the wording Keck used when describing how the city would be reimbursed.
“If this works, it will be wonderful,” McShurley said of the proposed four-year university. “It will be great. Maybe the best thing that’s happened here in a long time. But for a few years, why can’t you get your money back. I guess I wouldn’t even be here if the mayor hadn’t used one word: ‘Whole.’ Because I took that and ran with it. In the law, that means paid back in full.”
The phrase in question was part of Keck’s announcement to the community back in April, describing the proposed lease.
At that time, Keck said, “What I’ve said from the beginning of the university is that if the university were to locate at Cundiff Square that the city of Somerset would be made whole. And by whole I mean all costs incurred – purchase price, demolition costs, interest expense, any engineering that was spent – would get reimbursed.”
McShurley has argued over the past two council meetings – and through a letter to the editor to the Commonwealth Journal – that the city would not be ‘made whole’ because, looking at it from a real estate investment standpoint, the city would be losing money.
Keck stated that the 30-year lease proposal between the city and the university would have the university pay back all the money that the city has put into the property – the $1 million purchase price, the interest on the city’s seven-year bond for that $1 million and the cost the city incurred when it demolished the buildings that were on it.
That total comes out to around $1.4 million.
McShurley is arguing, however, that over 30 years, the city would technically lose money, because in that 30-year future, $1.4 million is only worth $800,000 in “current value.”
McShurley opened his comments Monday night by saying it was gratifying to hear from other city residents that he is bringing the question up, and that they are saying he is advocating for the citizens of Somerset.
“The implication there to me is that the council are not doing their jobs by asking these questions that may be somewhat uncomfortable for folks involved in the proposed lease,” McShurley said.
He went on to tell the councilors that if the city has to pay off its seven-year bond before the university pays back its full debt through the 30-year lease, then the city has to make its payments “from another pocket,” such as the General Fund.
“The city is missing the opportunity cost to use that money for another project or to pay down other debt or buy back its bonds to retire debt early,” McShurley said.
But, Keck countered, that is what municipalities do with all funds all the time. “We can always pay down future debts. We make decisions whether to reinvest that money. Whether to leave it in a checking account for a rainy day. That opportunity cost was present long before you started getting involved.”
Keck then admitted that he maybe shouldn’t have used the phrase ‘made whole.’
“Looking at it from a purely business perspective, maybe ‘made whole’ was the wrong terminology. We are getting dollar-for-dollar what we are investing,” Keck said.
McShurley then asked if the council was willing to admit that the land deal was essentially a gift to the university.
“Do you want to make a gift of the city’s assets to the university? Just say yes or no. I think the community wants to know,” McShurley said.
Council member Jimmy Eastham responded that it hasn’t come down to that level of negotiation yet, because neither the university nor the council have officially signed or approved the final contract.
“Good. There’s hope,” McShurley said.
Still, two council members, John Ricky Minton and Robin Daughetee, defended Mayor Keck and City Attorney John Adams, saying neither of them have tried to hide information.
Daughetee added, “As far as an investment, the City of Somerset is not a real estate investment company, or [meant] to profit as a real estate investment company. We’re a community development organization, and that’s what this project is.”
He said the city would be getting the money returned to it that it spent, plus it would add to the tax base by turning a run-down area into a place that would generate more occupational tax and make it a place where other investments would want to move into.
“That is the job of this council. That is the job of the mayor – to improve the city – and I think this project is an improvement to the city,” Daughetee said.