East Cocalico reverses stance on jointly owned site

By on July 9, 2014

An about-face and vote reversal by the East Cocalico supervisors at their July 2 meeting has likely put into momentum the sale of the multi-municipally owned building at 1975 N. Reading Road.

East Cocalico’s action follows a similar reversal by Adamstown borough on July 1 when supervisors voted 6-to-0 to reverse their previous vote and approve the sale.

By a 2-to-1 vote, the East Cocalico supervisors voted to accept the sole bid of $1.7 million made on the 20-plus acre property with the 45,000-square-foot warehouse building. DenTech, an industrial fabrication company based in Brownstown, made the offer. The owners intend to rehabilitate the structure and move their company to the site.

An open house at the 1975 N. Reading Road property -- during a spring rainstorm -- clearly showed wet floors and mold-covered ceilings and exterior walls, above, and peeling wallpaper and damaged carpeting, below, as the result of a leaky roof. Despite several groups that toured the 45,000-square-foot building and the property on which it is sited, only one bid was presented.  That $1.7 million bid was less than half of the $3.74 million purchase price of the property in 2006. (Photos by Stan Hall)

An open house at the 1975 N. Reading Road property — during a spring rainstorm — clearly showed wet floors and mold-covered ceilings and exterior walls, above, and peeling wallpaper and damaged carpeting, below, as the result of a leaky roof. Despite several groups that toured the 45,000-square-foot building and the property on which it is sited, only one bid was presented. That $1.7 million bid was less than half of the $3.74 million purchase price of the property in 2006.                     (Photos by Stan Hall)

The $1.7-million bid has been the subject of contention among the four municipalities – East and West Cocalico townships and Denver and Adamstown boroughs – that purchased the property at the height of the real estate market for $3.74 million with a stated intention to create a community recreation center.

Back on June 24, representatives of all municipalities sat down together to discuss the bid. With the exception of East Cocalico which delayed its vote until the July 2 meeting, the other three governing bodies decided to reject the offer. They instead said they would form a committee to consider other ways to sell and/or rehabilitate the 30-year-old building which had been home to Four Seasons Produce and, most recently, Purdue.

Voting yes were Supervisors Doug Mackley and Alan Fry, while Supervisor Noelle Fortna cast the negative vote.

“I think we can do better,” said Fortna. “We had our meeting with all four municipalities (on June 24) and the other three (West Cocalico Township, Denver and Adamstown) voted to not sell the building (for the bid received).

The $1.7 million bid by DenTech is considerably below the $3.74 million purchase price. East Cocalico, owner of 46 percent of the property, has the primary say over its final disposition. West Cocalico owns 32 percent, Denver 16 percent and Adamstown 6 percent shares of the property.ER20140709_CFourSeasons017

Steve Rapp, vice president of DenTech, gave a presentation to Denver Borough Council at its June 30 meeting detailing financial information from bankers, realtors, and other business contacts. That information helped DenTech officials arrive at their $1.7 million bid, higher than any of the experts consulted recommended.

Denver council members thanked Rapp for the presentation, but took no other action.

Rapp made the same presentation to Adamstown Council on July 1. After hearing the rationale, Adamstown council members voted 6-0 to sell the property.

Blake Daub, Denver council president, and Mike Hession, Denver borough manager, both attended the East Cocalico Township meeting.

“Denver has not changed its mind,” Daub said, regarding its June 24 rejection of the bid.

West Cocalico supervisors have not heard Rapp’s presentation. They do not have a regularly scheduled meeting until July 22.

Rapp gave the same presentation at the beginning of the July 2 East Cocalico meeting during the “Public Comment” portion of the agenda.

“I don’t know the legalities of selling it for $1.7 million,” said James J. Stoner, West Cocalico supervisor, after hearing Rapp’s presentation to East Cocalico supervisors. “At a public meeting, we took a vote to deny it.”

“We are still proceeding under the second amendment to the inter-municipal agreement,” explained Tom Goodman, East Cocalico solicitor. “The Cocalico leaders gave us a recommendation. The Cocalico leaders’ meeting did not rescind any action to sell by sealed bid the property.”

Resident June Kinbeck questioned selling the property, still owing more than a million dollars, and having nothing to show for it.

Both Fry and Mackley expressed that although they don’t like losing money, neither can see continuing to sink any more money into this property, without any guarantee that things will go differently in the future.

Rapp agreed that no one likes to lose money. Many homeowners lost money on their properties following the recession in 2008.

Fry noted the positives that a manufacturing facility will bring to the area, such as more jobs and economic stimulation to local businesses with the additional people.

“DenTech’s growth record has been about 5 percent annually — it’s positive,” said Rapp. “Twenty jobs were added in the last year and they’ve all stayed.

“With this new facility, we project adding up to 80 new jobs.”

While not officially part of the deal, Rapp proposed that a six-plus-acre parcel of the property will not be used by DenTech.

“We would be willing to donate it back to the township,” said Rapp. “You could sell it, use it for a library or whatever.”

Both Stoner and Daub spoke suggesting that since the property was jointly owned, any land donated back to the township, would also have a shared value, and they would hope that each municipality involved in the original purchase of the property would see some cash flow back to them should this occur.

“There are limitations to that corner of the property…and there is no access to Route 272,” Fortna said.

“We would be willing to discuss those issues and see what could be worked out,” said Rapp.

DenTech has 60 days to settle on the property.

East Cocalico adjourned into executive session for personnel reasons following the meeting agenda.

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