At Thursday’s work session, Mayor Bill Hereford said the purpose of the executive session was to discuss with Alan Furr, the city attorney, the legal ramifications and options regarding a lawsuit between the City and Pell City-Tifton Properties, LLC.
Initially Hereford said the executive session was expected to last 30 minutes, but he came out after 35 minutes and said the closed door meeting could last another 20 minutes.
The council reconvened its work session after meeting almost one hour and 20 minutes in the mayor’s office, only to adjourn from the work session without comment.
The civil case between the City and Pell City-Tifton Properties is tentatively set for Monday in St. Clair County Circuit Court.
Last year both the City and Pell City-Tifton Properties, LLC, filed notices of appeals after a commission appointed by St. Clair County Probate Judge Mike Bowling determined the fair market value of the one-acre well site along U.S. 231 South at $750,000.
City officials say the estimate was too high, while company officials say the amount determined by the probate office was too low.
City officials say the well is vital for the city and accounts for about 28 percent of the city’s water supply.
The council, on the recommendation of the mayor, voted 5-1 to appeal the case to the St. Clair County Circuit Court. Councilman Greg Gossett was the lone councilman to vote against appealing the case at the September 2009 council meeting.
Pell City-Tifton Properties, LLC, initially offered to sell the well site to the city for $1.9 million. This is the amount appraised by an independent expert hired by the company. Company officials say the appraiser specializes in land/water rights.
Kevin Whiteside, president of Pell City-Tifton Properties, LLC, said last year that according to current water rates, said the city could make $2 million within a two-year period from the water it pumps and sells to residents from the old Avondale well.
The city countered with its own appraisal, saying the property was only worth $310,000.
According to court documents, the city only pursued condemnation because an agreement was not worked out with Pell City-Tifton Properties, LLC, stating it was in the best interest of the city and its citizens that the city acquires ownership of the well site for public water supply purposes.
The city provided the Probate Court with a $750,000 check and secured a surety bond in the amount of $1.5 million so the city could appeal the case to Circuit Court.
Pell City-Tifton Properties, LLC, contends the city had no right to pursue condemnation. The company also filed a claim with the city, alleging that the city owes the company more than $70,000 for the use of its well.
Pell City-Tifton Properties, LLC, began leasing the old Avondale well to the city in November 2008, after the city failed to renew its well contract with Avondale Mills. The city could have renewed its contract with Avondale for an additional 20 years but failed to do so.
Avondale Mills shut down its Pell City textile operations in 2006.
After its closure, Avondale Mills sold most of its Pell City property to Pell City-Tifton Properties, LLC in 2007, including the well site, which is separate from the 28-acre mill site between Cogswell Avenue and U.S. 78.
Pell City-Tifton Properties, LLC, is a subsidiary of Thunder Enterprises of Chattanooga.
In November 2009, Hereford brought a proposal to the council’s table in an effort to settle the well site dispute.
He told the council that the city could buy all of the Avondale Mills property in Pell City for $2.47 million or the well site and 28-acre mill site for $2.2 million, which is approximately $52,000 per acre for the 28-acre plant site, not including the court-determined fair market well site price of $750,000, currently under appeal by both parties.
According to the November 2009 proposal, the council was required to purchase the mill site “as is” and the company was not agreeable to a Phase II assessment of the Avondale Mills plant property, which would have included soil testing of the land used for textile mill operations for more than 100 years.
The council failed to act on the offer due to a lack of a motion by any member of the council.
Council members said they would not consider buying the Avondale Mills plant property without a proper geological survey, soil testing and independent land appraisal.
All council members agreed that the well property was vital for the city.
Whiteside said last year it was impossible to reach an agreement for the well site with the city, because the mayor wanted to tie negotiations of the well site with the Avondale Mills plant site, and that the mayor jeopardized the city’s water supply because of the mill property.
Hereford denied Whiteside’s allegations, saying the well site was a separate issue to the mill site.
Hereford said he would like to see the Avondale Mills plant site turned into a park that could support a new public library building.
City officials say the old Avondale Mills well produces about 637,000 gallons of water per day, which is about 55 percent of its maximum pumping capacity of 1.152 million gallons per day.