Lee’s Summit is selling several parcels of city land and the City Council decided to hire real estate professional to conduct the sales.
The city staff had proposed taking bids, or asked if the council wanted them to negotiate or the sales.
Nick Edwards, management analyist, explained a process of competitive bidding called “upset bidding” where potential buyers of 7.5 acres on Pryor Road across from SummitWoods shopping center could offer counter bids in competition, which could get higher offers. The city would set a minimum price of $835,000 for that land.
The council decided at its Nov. 21 meeting to sell that land, also 307 Market Street, a former parks department building, land along Scruggs Road, and land at U.S. 50 and Hamblen Road.
Councilman Bob Johnson asked if the city had serious inquiries and if anyone on city staff was experienced in negotiating sales of land.
“Are they serious, are they offering real dollars?” Johnson said.
City Manager Steve Arbo said big box stores had interest in the site on Pryor Road. He said the city has a specialist in the purchasing department who acquires right-of-way for streets and utilities.
Council member Rob Binney, a real estate agent, objected to the proposal for the “upset bidding” saying he hadn’t heard of that particular method.
It calls for the city to take bids several times. For each round a new bids would have to increase by an amount according to a formula – at least 10 percent of the first $100,000 and 1 percent of the remainder. For example, to beat say a minimum bid of $835,000 the new bidder would have to increase the bid by $17,350.
Edwards said the method could get the highest price for the land.
Council members worried that bidders might be frustrated with the process and quit, leaving the city without a buyer.
“I don’t think that’s the way we should be looking at this,” Binney said.
Arbo said the city could issue a request to get proposals from real estate professionals and hire a firm that would market the properties and negotiate for the city. He said two individuals had approached him to offer their services.
The council agreed to sell the properties, but asked Arbo to pursue on hiring outside help with the sales.