With one council member absent Tuesday, Mayor Emery Doughtie cast the tie-breaking vote to approve a resolution which accepts the final high bid from a local law firm that sets up the potential sale of the Roanoke Rapids Theatre.

Councilman Wayne Smith, who made the motion to approve the resolution, was supported by Councilman Rex Stainback. Carl Ferebee and Sandra Bryant voted against the motion and with Tommy Daughtry absent, Doughtie cast the vote to approve passage of the resolution on a 3-2 measure.

The Roanoke Rapids law firm of Wellman & White submitted a $2 million bid on the theater — a bid which was submitted on behalf of clients that include Weldon Mills Distillery.

According to the resolution, the closing will occur within 30 days following the adoption of the document and the completion of a title examination that confirms the title is satisfactory to the buyer.

The resolution also requires that proof of funds be delivered to the city within five days of the request for proof of funds and the balance of the funds must be paid with cash at the time of closing.

The approval of the resolution came after discussions of the options available to the council, especially in light of developments concerning a deposit made last week buy a competing bidder who marked the outside of the envelope with the words “upset bid” but did not include an amount.

Victor Freeman of The Victor Enterprises did notify the city nearly an hour after the city opened the purported upset bid last Tuesday — which was for $2,350,000, according to City Manager Kelly Traynham.

It was this issue and others that prompted Smith to move forward with his motion to adopt the resolution. “I have concerns about Freeman’s ability to complete the sale,” he said.

Smith said Freeman initially had an issue with delivering a deposit back in June when the council rescinded his $1.75 million offer.

Smith also cited “the unprofessional way in which he has gone through this process. The city needs to go ahead and have this issue settled.”

Prior to the motion, Doughtie allowed J. Mitchell Armbruster, an attorney hired by Freeman, to speak to the council.

“The Victor Enterprises believes the city council should reject the resolution that’s before you,” Armbruster, a partner with the Raleigh law firm of Smith Anderson, said. “It’s only before you because the bid they submitted on July 18th was rejected. I know there were some issues taken with the bid but in these processes it’s often the case that there’s some imperfections in a bid.”

He said the point of the statue which covers this matter is to maximize the value the city can get “for the sale of this important property. You have an offer in this resolution before you to sell the property for $2 million and you have had it confirmed by Mr. Freeman that their offer is for $2,350,000 which is a significant increase of over 17 percent on the prior offer. That’s a significant amount of money for the city, for retiring your debt service and for serving the purpose of the statute.”

Armbruster said, however, “Albeit if the bid is imperfect or not by rejecting the resolution to accept the $2 million bid you could as (City attorney) Mr. (Geoffrey) Davis just went through, you could go ahead, not at this meeting but the next one, and accept that (Freeman’s) offer and restart the upset bid process and perhaps the offer could even go higher if there’s more upset bids. You get more for this property. I think it would be premature to stop the process at that time.”

The attorney said he believed what Freeman submitted last week could be accepted as a valid bid. “If you were trying to sell a house and you got an offer for $200,000 and then you got another offer to sell your house for $235,000 but there was some minor imperfection you would seek a clarification because you would rather sell your house for the extra $35,000. That’s money to put your kids through college. You’d rather try to clarify by working out the imperfections. By rejecting the resolution tonight you allow the process to go forward to allow the city to get the benefit of the higher bids and allow you to maximize your recovery for the city.”

Armbruster said going this route would be in keeping with the city trying to be flexible during this process. “When Wellman & White submitted an offer earlier on and they didn’t have their check with it you allowed them to submit their check later and then there was an issue with the advertising of bids. I think it would be unfair and arbitrary to not allow the same flexibility to happen in regards to Mr. Freeman’s bid  and you can do that by rejecting the resolution tonight instead of just leaving money on the table. I think that would be in the best interest of the city.”

Davis had advised the council that if it did not choose to pass the resolution affirming the final sale, then it should reject all bids, a move that would essentially reset the process back to May, and at that point, the council could:

Pass a resolution wherein it proposes to accept one of the offers they've already received which would initiate a new series of upset bids; advertise the property for sealed bids with a 30-day notice; or  send the property to electronic auction, which would have to be noticed for 30 days.

After the vote was taken to approve the resolution, Armbruster said he didn’t know what his next step would be. “Obviously, I’m disappointed by the outcome but I’ll have to talk to my client and their other counsel to see what they want to do next.”

Stainback said the city’s goal the whole time was to sell the theater. “It appears now that we think we’re on the way to get it sold.”

Ferebee said, however, “Our goal was to sell it — to sell it at the highest price and the highest offer. It could have been very easy to put it back out there to the highest bidder. We wanted to get the most for our citizens and now we just sold them short for $250,000 for what I’m considering a technicality. It would have been very easy to reject the bid and start on an even playing ground and start the bid over.”

Ferebee said he believes the council members who voted to move forward with the resolution favored the local group. “I don’t have a problem with the local group getting it but I do feel we need to get the best bang for our buck for what’s owed on it. If the local group had the highest bid against this other guy, then so be it.

“The local group started at $50,000 a month. Then it went to $1.5 million, went to $2 million. We want the best bang for our citizens and the most money for that theater and we didn’t do that. I think we failed our citizens with that. At some point and time there’ll be dollars that we’ll be asking for to help with that arena and the less dollars we have to ask for would have been better.”