Sell Order: Feds tell county KML must be sold
EAGLE RIVER — The Keweenaw County Board has been ordered to place the Keweenaw Mountain Lodge on the market to satisfy unpaid bond debts to the U.S. Department of Agriculture Rural Development (RD), according to a letter from RD’s state office.
The debts arise from three revenue bonds issued between 2007 and 2008 totaling $1.803 million, minus interest accrued on the debt.
In addition to selling the KML, RD set forth terms and conditions under which the county must proceed with the sale of the facility.
The county (issuer) is required to put the facility, including approximately 167 acres occupied by the golf course, up for sale “as is” for a period of six months, the letter states.
In addition, the county must:
•Partition the facility from the 325-acre Keweenaw Park, if necessary, and obtain a survey of the facility and all surrounding acreage to be listed for sale, and provide such a survey to the agency.
•Engage a realtor “to publicize, list for sale and otherwise market the sale property.” The letter states the government has the right to review any sale contract, and accept or reject, any contract between the county and a buyer, before the sale can be finalized.
The government will also approve the Mountain Lodge’s sale listing, the letter states, and detailed the terms under which the county can proceed:
•The asking price will be $1.5 million, based on a Dec. 10, 2015, appraisal.
•The facility’s physical and infrastructure requirements, including any known environmental liabilities (lead-based paint contamination) must be disclosed to any potential buyer.
•The property must be listed for sale to the general public, in print and online.
•The county must forward all purchase offers to the government for review and consideration.
•The government must approve the terms and conditions of any purchase offer before the county can accept it.
•The government is entitled to 100 percent of the sale proceeds, minus closing costs.
The letter goes on to state that if the KML is not sold within six months from the listing date, “the parties will reconvene to discuss additional options.”
If the county does not agree to the terms set forth in the letter, RD will initiate the process of referring the county’s delinquency to the U.S. Department of Treasury for cross-servicing and offset, the letter states.