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A stipulation contained in the sealed bid for purchase of the Roanoke Rapids Theatre forced city council Tuesday to reject the bid and start the advertisement process again.

That stipulation is one in which Dewey and Leslie Brown of Brown Entertainment LLC requested a solution to decrease property taxes by 50 percent for 10 years.

The new schedule sets the deadline for sealed bids to be received and then opened at 3 p.m. on December 7 at Roanoke Rapids City Hall.

The Browns, who own venues in Reidsville and Liberty, were the only bidders on the theater and submitted a sealed bid of $1,500,003 — $3 above the reserve amount the city advertised in its request for bids.

City Manager Kelly Traynham said there were other contingencies in the bid which staff has been evaluating since last week’s bid-opening.

City Attorney Geoffrey Davis told the council during the special meeting, “I’ve been a big advocate of this process and trying to get the theater sold … I think there’s a real value to having this off of the city’s books and having city personnel no longer concerned with it.”

Davis said he was glad to see the interest from Brown Entertainment but there was concern with the stipulation addressing the reduction in property taxes. “I’m not too worried with any of those other stipulations but one of them is an issue here.”

The attorney said he didn’t believe the city has the authority to reduce the taxes — “certainly not through the sealed bid process. Since the bid they tendered was contingent upon that and it’s contingent upon a condition that I don’t see the city has any authority to enter into, I would say the council can’t accept that bid because of that condition.”

Davis said lawmakers have granted the city some control over property taxes. 

Property taxes are levied by the city and the county. “The bigger part of that tax levy goes to the county which we don’t have any say over whatsoever,” he said.

The numbers the city does have control over, Davis said, still does not give it authority to reduce taxes through the sealed bid process. 

The city could do that through statutes related to economic development. “You can follow through those procedures and that is something that can be agreed to as part of that but to be able to take advantage of those there’s a lot of preconditions that have to be met. The biggest issue is you have to generate data to show how this will help the local economy, how this will create jobs and bring in revenue and develop surrounding properties. That’s not something the city or any of our city employees have expertise or the time. You really have to contract an outside expert to generate that data so you’ll have it to rely on.”

Failing to do that, Davis said, and agreeing to accept the proposal would create problems down the road which could make the transaction voidable. To go the economic development route would require the city to go with an outside expert to generate the necessary data. 

But Davis said, “As far as tonight goes, because that condition is in the bid as tendered, I don't think that the council can accept it. It’s not something where you can accept the bid and then negotiate that condition away. That bid was made upon that specific condition.”

The attorney said there are no shortcuts in the process. “We’ve got to start the whole process over.”

Traynham said any tax forgiveness would have to be pursued through the Economic Development Appropriations Act. “It seems quite clear that in the general statutes under the Machineries Act there’s only three possible ways to forgive any taxes.”

Those three ways are: Taxes imposed by a clerical error; an illegal tax; or a tax imposed for an illegal purpose. “By the nature of that it’s very clear and expressly prohibited that unless it’s for a public purpose under the economic development statutes that the city council cannot just waive taxes outright. In fact it goes as far to say that you can be personally held liable for those who vote in favor of it. We want to make sure we follow the process in a lawful way. We certainly want to encourage the interests of the Browns or any other interested persons in the theater. We just want to make sure it’s done following the legal procedures.”

Councilman Wayne Smith made the motion to reject the bid and Rex Stainback cast the second to the motion, which passed unanimously.

Before the rejection vote, Mayor Emery Doughtie said, “This council generally takes great consideration from our city attorney, following that advice. We know that they’re leading us down the right path. We were excited that we had interest in the property. We would like very much for this property to be in private ownership.”

But, Doughtie said, “We can’t vary from the general statutes.”

Mr. Brown, before the vote was taken, asked whether the bid could be amended on the spot, to which Davis replied it could not. “I wish there was a simpler way to negotiate but unfortunately the statutes work with us having to go through this procedure. To do it the right and the legal way we basically have to reopen and advertise.”

Said Mr. Brown: “I guess I need to speak with y’all a little bit more about (being) closer to terms instead of just guessing what to do. I can put 10 more bids out there but if we’re not together there’s no business in wasting everybody’s time. I’d love to be able to come together. I’m sure we can work this out.”

After the special meeting was adjourned Mr. Brown said he and his wife want to resubmit. “I guess we’ve got a few details to work out.”

He also said he was willing to talk with county officials about the tax reduction issue. “These little things pop up. It’s just a little bump in the road. Hopefully we can work all this out.”