Land contract at center of concern old courthouse property.

The pending sale of the old Leelanau County courthouse campus in Leland appears to be hitting another snag.

The county board's "Leland property subcommittee" met last week with county natives James Varley and Gene Kelly of Varley-Kelly Properties, who hope to purchase the 2.4-acre property in downtown Leland for $2.4 million and redevelop it into a 20-plus unit residential neighborhood.

On May 16, the subcommittee and developers heard from Leelanau County chief assistant prosecutor Doug Donaldson who recommended that the county board reverse the decision it made last month to enter into a land contract with developers as their earlier agreement with the county was set to expire. Donaldson opined that state law prohibits units of government from extending credit through land contracts.

The county board’s decision last month to offer a land contract to Varley-Kelly properties was precipitated by other snags encountered in the deal related primarily to water quality concerns on the former courthouse campus.

Proposed terms of the land contract would have delayed sale of the property by several months while the county Brownfield Redevelopment Authority (BRA) authorized additional tests of groundwater in the area and explored alternative plans for a water system to serve the proposed neighborhood. Preliminary tests indicated high nitrate levels from unknown sources – higher than those allowed by state environmental laws for developments of that size. The snag would have necessitated the digging of a community well off the site – tentatively more than 2,000 yards away in the township-owned Hancock Park.

Although the BRA’s involvement in the project has imposed additional rules and requirements on the county and the would-be developers, the state grants, low interest loans, and special tax incentives available through the BRA were expected to offset much of the cost of cleaning up and redeveloping the now “obsolete and blighted” county-owned property. The county vacated the old courthouse and other buildings earlier this year; and the new county seat in rural Suttons Bay Township was formally dedicated on Sunday.

At the regular monthly meeting of the Leelanau County Board of Commissioners Tuesday night, the board heard from District No. 5 commissioner David “Chauncey” Shiflett, who chairs the “Leland property subcommittee.”

A licensed real estate agent, Shiflett said that – “with all due respect to Doug Donaldson” – he wasn’t convinced that the chief assistant prosecutor’s opinion on the legality of a county land contract with the developers was correct. Shiflett said he thought the county’s corporate counsel should also provide an opinion before the county considers reversing its decision on a land contract. Shiflett also said he believed it would be important for the BRA to move ahead with testing to see if a deeper well on the county property would provide water of sufficient quality for the proposed development.

Shiflett offered a motion to instruct the county administrator to seek an opinion on land contracts from the county’s corporate counsel. The motion carried 7-0.

District No. 2 commissioner Mark Walter, who serves as county board representative on the BRA board, offered a motion that the county board recommend to the BRA that it order a new aquifer analysis at the old courthouse site and take steps to demolish some of the old buildings in the property in the near term. That motion also carried unanimously.

The Leland property subcommittee was slated to meet with developers again this morning.

In other business at its regular monthly meeting Tuesday, the Leelanau County Board of Commissioners:

• Formally ratified a decision made last week by the board acting as its Executive Committtee to place a millage request on the Aug. 5 Primary Election ballot seeking a .275-mill levy for six years to support county Commission on Aging (CoA) operations. The vote was identical to last week’s: 6-1, with District No. 7 commissioner Melinda Lautner opposed.

• Decided to table a proposal to modify terms of a health insurance program for county employees that was recommended for approval in a 7-0 vote at the May 13 executive committee meeting following a briefing from an insurance company representative. Shiflett said he did not believe he had enough information about the proposal to make a decision and asked that more information be presented at the county board’s next executive committee meeting on June 10. The county board voted 6-1 in favor of Shiflett’s motion to table further discussion of the proposal until next month, with District No. 3 commissoner Will Bunek opposed.