Home Opinion Editorials HBC’s deal a bad one
HBC’s deal a bad one
We’re afraid that Historic Baker City Inc. has let a financial windfall slip away.
Half of it, anyway.
We were initially elated to learn last year that the unfortunate closure of Bank of America’s Baker City branch, which was located in the 126-year-old Ison House, had one beneficial side effect.
Kate Dimon, HBC’s director, secured from Bank of America officials a deal by which the company would sell the Ison House, at the corner of Washington and Resort, to HBC for $1.
That’s a single buck.
Which is a good price indeed for a property which has a market value of $320,000, according to the Baker County Assessor’s Office.
HBC officials initially discussed keeping the Ison House and possibly using it as HBC headquarters as well as the site of a library with documents about historic buildings.
The current plan, though, is to continue to refurbish the building — Dimon and her husband are living there and doing much of the work — and then to sell the property.
This makes some sense.
Even if HBC can’t get market value for the historic home, the organization stands to collect a significant sum.
To put the numbers into perspective, HBC’s main source of current revenue — property tax assessments and a business license fee charged only within the downtown Economic Improvement District — amounts to about $42,000 per year.
Selling the Ison House could conceivably bestow on HBC an influx of dollars the organization could use for a variety of projects, possibly including buying and preserving other historic buildings.
Winning the lottery is a phrase that comes to mind.
Except in this case the more accurate analogy would be sharing a lottery jackpot with someone else.
Because HBC is entitled to only half of any proceeds from selling the Ison House.
The other share belongs to Veteran Advocates of Ore-Ida (VAOI), a nonprofit group that started in Ontario and expanded two years ago to Baker City, where it operates from the Heilner Building at 1901 Main St.
Speaking of good deals, VAOI came by its 50 percent share in the Ison House, a property that could be worth $320,000, for a relative pittance: about $3,400 in closing costs associated with the transfer from Bank of America to HBC.
The notion that VAOI in effect rescued HBC — that without the former agreeing to share the closing costs, HBC would have had to turn down Bank of America’s $1 deal — is ludicrous.
If Baker City hadn’t been able to come up with $3,400 — unlikely; the city recently approved a $16 million budget — we’re confident that a group of HBC members, or perhaps even a single person, would have written the check.
If nothing else HBC probably could have applied for a credit card and charged the closing costs — at least the lender wouldn’t have received a half share in the Ison House.
Trouble is, none of those things happened, so far as we can tell. Dimon made the deal with VAOI without initially consulting her own board of directors, although the board had many discussions about the matter later.
As a business decision this deal is bad enough.
Yet it looks even worse when you add to it the existing relationships among Dimon, HBC and VAOI. HBC rents office space in the Main Street building where VAOI is located. And Dimon was until recently listed on VAOI’s website as a member of its board of directors.
It’s hardly surprising, then, that there was considerable discord among the HBC board this winter, including the Baker City Council’s representative, Clair Button, who left his position.
VAOI, from all indications, is a good organization that does fine work on behalf of veterans and their families. And it may well be that HBC and VAOI can work together on mutually beneficial projects.
But giving up as much as $160,000 for $3,400 in closing costs is far too one-sided to qualify as mutually beneficial.
HBC should offer to buy back VAOI’s share of the Ison House for the amount borrowed for closing costs, plus reasonable interest.
And VAOI should take that offer.