New Life For Troubled Property

Purchase agreement approved by a city south of the metro.

Following a due diligence period, the City of Plattsmouth will acquire all the land of the former Castaway Pointe development east of the city on the Missouri River banks.

The Cassgram reports the city was looking at accumulating costs as a federal civil lawsuit filed by the current Castaway owners against the city was scheduled for trial in July. Liability insurance did not cover city costs in this case, said City Administrator Erv Portis. In addressing the city council Monday night, Portis said that even if the city prevailed in court the “eyesore” would continue to exist so this solution not only settles the lawsuit but also sets up a plan to clean up the property and restore infrastructure. The city intends to enter into a “business relationship with a contractor” to manage the property, he said.

The purchase price is $1.5 million. With plans for a park for recreational facilities that will bring tourism, the city can issue economic development fund bonds. The bonds will total $2.195 million. The money above the purchase price will be used for repairs, clean-up, restoring the marina, and to begin development of a recreational vehicle park.

The bonds, with a 1.65% interest rate, will be funded by the city sales tax currently in effect.

The Castaway Pointe plans date back to 2006. (Archives July 14, 2006 at Sales at the location were slow and agreements between the city and Castaway were modified as the project struggled. Then flooding in 2011 caused major damage at the development which only had a handful of residential structures erected.

The current owners filed the lawsuit in the summer of 2012. The plaintiff claimed it “had no notice” of ordinance #1819—an ordinance adopted in 2010 by the city council that changed the floodway map. Those flood map changes resulted in major consequences for future construction in the development. The filing also claimed the city was guilty of breach of contract.

Portis told the council there had been FEMA hearings and local public notices prior to the 2010 action. He said the city “really had no option” but to adopt the new federal flood base elevations because of federal flood insurance implications for local business and home owners.

The news release said there is an agreement “that all claims filed by Castaway Pointe LLC against the city will be dismissed with prejudice on closing of the settlement and the purchase agreement.” That means the suit cannot be re-filed at a later date.

The purchase agreement spells out that all liens—totaling approximately $4.5 million, said the news release—will be cleared off the title before the city purchase. State statute requires the city to obtain an appraisal before closing.

All city council agenda items dealing with the 30-acre Castaway Pointe property acquisition and its financing passed on unanimous votes.

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