What REALLY Went On When Cherokee County Commissioners Bought Foreclosed Cornerstone Building in Murphy North Carolina for Over $1.3 Million on August 13, 2010?

Controversy over the purchase of the Cornerstone Building in Murphy North Carolina by 3 lame duck county commissioners has monopolized both meetings of the Cherokee County Board of Commissioners this month.  Their decision to quickly purchase the foreclosed building from Unity Community Bank for the full asking price of $1,350,000 was questioned by a room full of concerned taxpayers.

I attended the first meeting on September 7 and what I heard led me to do some research into the details of this transaction.  After going to the County Manager, the county's financial officer and the County Attorney, I finally obtained the documents that I requested - 83 pages of them. 

Here's what I found:

No copies of any documents from the August 13, 2010 closing were available at the County Courthouse for public review when I inquired on September 8, although nearly a month had passed.

The offer to purchase was dated August 9 and the closing took place on August 13.

The purchase agreement signed by Commissioner Jonathan Dickey and witnessed by County Attorney Scott Lindsay stated that $13,500 in earnest money was paid to a local broker at the time the document was signed, but no credit for earnest money appeared on the closing statement.

The property was shown as listed by the bank for $1,350,000.00 on August 11th and marked as sold for full price 2 days later on our MLS.

The listing agent works for the broker who formerly owned the building and lost it in the foreclosure.

In answers to pointed questioning, the County Attorney assured everyone at the September 7th meeting that no commissions were paid to the broker who lost the building to foreclosure - he said he wrote the check at the closing from his trust account directly to the agent. 

The closing statement showed that the commission check was written to the brokerage company, not to the agent. 

The purchase agreement stipulated that the County had no representation as a buyer. 

Part of the building is leased to the TVA.  The lease states that rent is paid on the first of the month, but there is no proration of rents listed on either side of the closing statement. 

There are even more questionable issues - see Part 2 of my review of the documents related to Cherokee County's purchase of the Cornerstone Building -

Cherokee County's Purchase of the Cornerstone Building in Murphy North Carolina - Is This $1.3 Million Transaction Voidable By Taxpayers?