OSAWATOMIE — An online auctioneer has put in an offer to purchase the former Ron’s Country Market building on Sixth Street.
But the owner of Equip-Bid.com Auctions is not looking to put a grocery store in the building, which is located at 701 Sixth St. He has proposed liquidating the city’s grocery store equipment through his online auction site.
Andy O’Hanlon, owner of Equip-Bid.com, told City Council members at their Thursday, June 13, meeting he would like to sell the city’s grocery equipment for a 25 percent commission, which he said was his standard rate.
The community has been without a grocery store since Ron’s Country Market closed its doors in 2017. Much of the equipment, valued at $400,000, was almost brand new, and the city purchased the equipment through a lease-purchase agreement with First Option Bank for a reduced cost of $150,000 in the hopes of bringing another grocery store to town.
In a memo to the council, City Manager Don Cawby summarized the current situation.
“Two weeks ago, First Option Bank received an offer on the building from Equip-Bid, an online equipment auction site, to purchase the property, but the offer was contingent upon Equip-Bid being allowed to sell the equipment through their site,” Cawby said in the memo.
An attachment to the memo spelled out a proposal from Equip-Bid to liquidate the grocery store equipment at 25 percent commission and the auctioneer would not allow any reserve (minimum price) to be placed on the equipment.
O’Hanlon’s real estate deal with First Option Bank was to close Monday, June 17. That would put the city in the awkward position of having its equipment in the auctioneer’s just-purchased building if they chose not to allow Equip-Bid to sell the equipment.
Cawby, Mark Fuchs of First Option Bank and O’Hanlon agreed to meet at City Hall last Friday, June 14, to discuss the deal.
“They are going to delay the closing until after the next council meeting, so we can work on some options and hopefully reach an agreement,” Cawby said Monday of the meeting with Fuchs and O’Hanlon.
Council members expressed varying opinions about the auctioneer’s proposal. Some balked at the idea of paying a 25 percent commission when Cawby had identified another company, Grafe Auctions, that would sell the equipment through an internet auction at 12 percent. The auctioneer was recommended by Associated Wholesale Grocers, Cawby said in his memo.
In a follow-up interview, Cawby gauged the mood of the council.
“I think some don’t want to do anything unless it involves bringing in a grocery store, others just want to be done with it, and some were in middle,” Cawby said. “We all want to do the best deal possible and what’s best for the community.”
On the back end of the deal, Cawby said he and O’Hanlon reached common ground on one point — neither wants the expense of removing the equipment from the building, which would require some of it to be torn out.
“The bank’s been fine, and after I talked to Andy a little more about the back end of the deal, it would be easier if he sells it,” said Cawby, though he wasn’t advocating that position at this time.
Some council members at their June 13 meeting expressed concern that O’Hanlon couldn’t tell them what he intended to do with the building and how many jobs it might add.
Council member Dan Macek said it might be easier to accept the 25 percent commission if the council knew what the benefit would be to the community in regards to bringing a new business to town that would be employing people and paying taxes.
“After talking to Andy, he has a couple of ideas for the building, but I think right now it’s a speculative real estate (deal) on his part,” he said.
The council did not take action on O’Hanlon’s proposal and authorized Cawby to enter into negotiations. Council members acknowledged the city would probably not recoup the full $150,000 it paid for the grocery store equipment, but said the council made the purchase with the good intention of bringing another grocery store to town.
Cawby said during the meeting that he didn’t foresee any interested parties stepping forward to put in a grocery store. A couple of possibilities didn’t materialize, he said, once perspective buyers saw the size and condition of the building.
Before the next council meeting, Cawby said he would do his due diligence to find out what the equipment potentially would be worth if auctioned off, and continue to work on negotiating the best deal possible.
“Maybe I can get him to move a little bit (on his commission) and reach an agreement,” he said. “I will be putting a proposal together to take back to the council (June 26) and they can vote it up or down.”