Accusations fly over Carefree’s Eight Sundial Circle purchase

By Curtis Riggs | August 5, 2009

Tension high as the new and the old Council Square off
CAREFREE – Tension and hard feelings have been simmering since the Eight Sundial Circle purchase late last year boiled over at Tuesday's town council meeting.

Present and former councilmen raised accusations of rushing to purchase the now vacant building for $850,000. The discussion was marred by claims of finger pointing and laying blame among new and former council members.

The controversy was driven by the renegotiation of the $500,000 loan in order to obtain a lower interest rate and Mayor David Schwan's push to move the Carefree Town Hall into the building. Councilmen Bob Coady and Peter Koteas took one side and Councilman Glenn Miller and former Councilman Greg Gardner, who put together the deal to purchase the building, took the other.

The town qualifies for a "municipal" 4.52 percent interest rate because the building is now vacant. Although the interest rate change reduces the town's payments to $3,912 a month, the town has to pay $10,000 to change the loan.

Koteas charged the former council did not do its due diligence on the purchase and the loan, did not disclose there was a 6 percent pre-payment penalty on the loan or that the building would soon be vacant.

Miller responded there were not many options in acquiring the loan when the deal was being put together.

"That was the best deal we could get at the time," he said, adding detractors of the purchase are not "looking at the big picture."

We are paying $10 a square foot," he said with respect to the lease in the present town hall/court space, which will expire in 12 years. "The rent will triple in 12 years."

He and Koteas then accused each other of "finger pointing" about who made the biggest mistakes in the purchase. Koteas indicated Miller was more at fault because Miller was on the previous council and he wasn't.

"That's right, I'm stupid. We just need to admit it was a mistake," Miller responded in reference to being unaware of the prepayment penalty and other issues.

Citizen John Traynor thanked Koteas for his remarks and being more forthcoming than the council was in December.

"When this was announced it had an air of backroom smoke and we were told we had to make a hurried decision by the end of the year."

Gardner responded, "There was no rush to judgment and there were no backroom deals."

Schwan talked about "taking the final steps in moving town staff" into the building to eliminate one rent payment.

Miller estimates it will cost $70,000 to move both the town hall and the court.

The council has already approved $5,000 in architecture fees and $7,000 to install phone and Internet service in the new building.