Longtime real estate agent: City councilors, mayor likely flipped over lawsuit threat

Clockwise from top left, City Attorney Terence O'Rourke, Mayor Paul Callaghan, City Manger Blaine Cox, Real estate agent Doug Lachance, City Councilors Amy Malone and John Larochelle. (O'Rourke, Callaghan/Rochester Voice file photos; others/Courtesy)

ROCHESTER - Of course no one knows why two city councilors flipped votes and a third changed his mind not to abstain during an eight-minute secret meeting on whether the city should spend $299,000 to buy land for a third city fire station on Tuesday, but one longtime realty agent thinks he's pretty sure how it went down.
Prior to the secret meeting City Council failed to muster the necessary two-third majority to move forward with the purchase with councilors Jim Gray, Amy Malone, Skip Gilman, Steven Beaudoin, and Mayor Paul Callaghan voting against the purchase. Abstaining on the vote was John Larochelle, who said he was a friend of the owner, Arthur Taylor Jr., of San Jose, Calif..
The initial vote taken at the 53-minute mark failed to get the supermajority vote, which was needed as funding was from supplemental appropriation from the unassigned fund balance and not in the budget.
As the meeting was about to end, however, City Attorney Terence O'Rourke called for a so-called nonmeeting, which is occasionally called by the city attorney on legal or due process grounds and is strictly confidential, Beaudoin said on Wednesday.
While he couldn't divulge any of the back and forth at the meeting, Beaudoin did say "that timeliness was a factor."
The purchase and sale agreement for 181 Highland St. in East Rochester obtained by The Rochester Voice shows that the document was dated June 13 and required conveyance be made no later than Wednesday.
"I'm pretty sure they were told the city would be faced with a lawsuit if they didn't go through with the sale," said Doug Lachance, a former mayor, city councilor and longtime real estate agent with Hourihane, Cormier & Associates of Rochester.
O'Rourke confirmed with The Voice on Wednesday that the city plunked down no deposit with the purchase and sale, which is most often the case with a residential purchase, and with many commercial P&S documents, too, Lachance said.
"I'm shocked that they (the seller) accepted the purchase and sale (from the city) with no public money," Lachance said on Thursday. "Cities are not exactly immune to not having a deal go through."
But even though no money was put down - which would have automatically gone to the seller in a typical case had the deal not gone through - that doesn't mean the owner of the land can't sue for damages, Lachance said.
"I'd be advising the seller to sue for $100,000 if I were his agent," Lachance said. "That's an appropriate amount in this market."
With the purchase and sale agreement violated on the very next day, Lachance reasoned that those who flipped were probably told that they'd be costing the city a ton of money.
"You know he (the seller) is gonna sue," he said. "I mean it's public money."
Lachance also wondered what drove Larochelle to flip since abstention is a personal decision made by a board member, or was their some inappropriate arm twisting.
"I can tell you I was not happy with the outcome," said Beaudoin, who told the council earlier in the Tuesday meeting that this is not the time to buy when the real estate market is so hot.
"It's going to come down, soon," he said Wednesday. "We're in a recession right now. It's bound to come down. I've been in the real estate market all my life, and it goes up and down. Now is not the time."
Rochester City Manager Blaine Cox said earlier this month that the city had been contemplating building a third city fire station in East Rochester for some time and recently signed a purchase and sale agreement with the landowner prior to Tuesday's vote.
While it's expected that the City Council approved the city's negotiating to buy the land, it's not clear whether they approved the execution of a purchase and sale with no deposit. It's also not clear they were aware of the substantial financial liability of executing a purchase and sale and then reneging on it.