A “For Sale” sign posted this week on an acre lot at the corner of Main and Fourth Street North represents the prospect of a prime piece of downtown property changing hands.
For the city, it represents a breach of contract that could play out in chancery court.
Scott Ferguson, CEO of Financial Concepts, is offering to sell the property for $950,000, according to the online listing, almost three times the $270,000 he paid the city for it in June 2021.
“That was the price my seller wanted to put on it,” said listing agent Steven Guist with Crye-Leike Realtors. “I think it is negotiable to some degree.”
The property was home to the Gilmer Inn before the city bought it for $425,000 in 2015 and demolished the building. Now, the city is trying to negotiate buying it back from Ferguson for the price he paid the city.
At the time Ferguson purchased it, the contract included plans for a pair of two-story buildings that would house a Financial Concepts office, other retail space and apartments, along with 50 parking spaces. Citing a reported $7 million it would take to build that development, seven times what he initially planned to invest, he asked the council in June to approve a downsized plan with a single two-story building.
The council must consent to any changes to the contract, but since the property is in the Downtown Historic District, it sent Ferguson to first run the new plan by the Historic Preservation Commission to rule on whether the change would be consistent with the neighborhood. In June, Ferguson told the council he would “sit on” the property as a vacant lot or the city could let him “build this.”
He has apparently opted instead to move on, though Mayor Keith Gaskin confirmed Ferguson is still on the agenda to appear Sept. 5 before the Historic Preservation Commission.
Ferguson did not return several calls and messages from The Dispatch by press time.
The council during executive session on Tuesday found Ferguson to be in breach of his contract with the city, Gaskin told The Dispatch, and authorized the mayor and City Attorney Jeff Turnage to enter negotiations to buy it back. Gaskin said Ferguson has been notified by phone of the council’s finding, and the mayor also is sending him written notice.
“If he is not in agreement to stay within the contract that was set with the city — in other words, try to move forward with his original plan or something similar the council could accept — then if he didn’t want to sell it back to us, the next step would be chancery court,” Gaskin said.
In chancery court, the city could seek to rescind the deed and restore it to the city, which would require the city to return the purchase price, Gaskin said. He hopes it doesn’t come to that.
“The mayor and council would prefer he stay with the original plan that the agreement was made upon, or something very close to it, that would prevent him from breaching the contract,” Gaskin said. “We hope that we’re able to come to a resolution that is a win for the city and for Scott. We think a lot of him and his family. They are good citizens who have a great business in town. We sure don’t want this to turn into something it doesn’t have to.
“We don’t have a strong desire to own the property again,” he added.
Before the city can file anything in court on the case, it needs to appoint a special attorney. Turnage, who has been involved in preliminary discussions about the property issue — including a June work session and council meeting where Ferguson appeared — will have to recuse himself from the case. He told The Dispatch Thursday evening a fellow attorney at the Mitchell, McNutt and Sams firm represents Ferguson’s LLCs, which creates a conflict.
Gaskin said he is consulting with Turnage on other attorneys who can represent the city in the matter, and he expects the council will hold a special-call meeting soon to appoint one.
In the meantime, Guist said he’s “gotten a call or two” from potential buyers.
“It’s a great location. (Ferguson has) already done environmental work on the lot and soil studies that are available for any potential buyer,” he said. “Basically, it’s ready to build on.”
If it does sell, Gaskin said he doesn’t know whether the requirements of the city’s contract with Ferguson could be transferred to a new owner.
“I’m not sure how that would work,” he said. “That needs to be researched.”
Zack Plair is the managing editor for The Dispatch.
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