MONROE CITY COUNCILMAN DAVID KENNEDY listens as council members argue against a motion he made with fellow council member Margie Rodriguez to allow the city to sign a letter of intent with a large developer, a first step toward a land deal that could have gotten the city nearly debt-free, but could also have brought a Walmart to town. PHOTO BY DAN ARMSTRONG

“This might be the most important vote of your lives,” said Monroe Mayor Donnetta Walser as she sensed the council was about to vote down a proposal to sell a large piece of land to a Seattle developer.

A vote to sell meant the city would be nearly debt free. But the council voted "no."

With that, the Monroe City Council Tuesday shot down a land deal that could have gotten Monroe mostly out of debt but also could have brought a Walmart to the city. Seattle’s Sabey Corporation, a large and well-regarded development company, wrote a letter of intent to the city Sept. 29, offering $9,600,000 for 24.37 acres of land on the site occupied until recently by the Lakeside Industries gravel pile behind Galaxy Theater.

In earlier council meetings, representatives of the company said they wanted the land for a big box store, which was quite likely to be Walmart, although there were other possibilities.

Tuesday, in spite of pleas from some city employees who turned up specifically to ask the council to sell and avoid a debt crisis, the council decided that it was more important to keep Walmart out of the city than to keep the city out of the red.

The money could have forestalled a looming budget crisis for the City of Monroe. The city still owes for the property on the other side of North Kelsey, which it bought from the county for $16.1 million; ironically, also to keep Walmart out, as the company was believed to be exploring the option to come to town. The city sold part of that land to Lowe’s but the developer who was supposed to buy the other half backed out, leaving the city to pay off the remaining $11 million as the economy tanked.

The money set aside from the earnest money abandoned by the developer and from the sale of the Lowe’s parcel is almost gone. Once it runs out, the city will be paying for the land out of the already badly-strapped general fund, unless the Lakeside site, which the city owns free and clear, can be sold.

“I remember four years ago very clearly the outcry of this community to avoid the potential arrival of the big box that is likely on the table now,” said council member Mitch Ruth. “The previous council agreed to enter in $16 million debt because of it.”

“I don’t support having a Walmart as a potential tenant or landowner in the North Kelsey area,” said council member Geoffrey Thomas. One of the reasons I bought the property was we were pressured by the concern that Walmart might buy at North Kelsey. We had members of the Chamber of Commerce, all sorts of folks, talking about why we should buy the property.”

Walser, however, said that Walmart, if indeed that’s who Sabey wanted to bring in, might actually be good for the city.

The council raised other objections as well.

“This property has not been marketed,” said council member Kurt Goering. “I’ve heard from a number of people that this is the only deal on the table, but I don’t really know that. We have never marketed it. It feels rushed.”

Council member John Stima worried about traffic. “Obviously if you bring more people to town, traffic’s not great now,” he said. “Traffic will only get worse unless there’s some major upgrades.”

Ruth also objected to the fee that the city would have to pay Sabey’s broker. “I’ve never agreed to pay their broker and will not ,” he said.

And Stima and others worried that the city’s vision for the North Kelsey parcels of a “Main Street approach,” a plan in which a central street winds though a shopping center that includes a variety of shops, would be lost.

“Basically, an affirmative vote tonight means that we’ve pretty much shelved that Main Street idea,” said Stima. “So I can’t in good faith go through this dance, this charade, this letter of intent... spending time on staff, Sabey spending money.”

Walser countered that the city will have the right to approve Sabey’s site plan, should the deal go forward. She also noted that Sabey had thrown an extra $100,000 into his offer to help offset the broker’s fee. And council member David Kennedy argued that the letter of intent was only a preliminary step, not a final purchase and sale agreement. “Let’s give these professionals a chance to bring something to us,” he said. “If they can’t meet what the council and constituency wants, we cross that bridge when we get there.”

“We’ve been talking and being careful for two years,” added council member Margie Rodriguez, who with David Kennedy made a motion to sign the letter of intent. “I don’t feel we’ve rushed. It’s only a letter of intent.”

City Finance Director Carol Grey, who seldom comments unbidden in city council, added a word before the final vote.“I feel like I have to be fiscally responsible in relating the terms to you,” she said. “Since 2008, we’ve paid $808,000 in interest to Bank of America. “We still owe $11,207,000 and Bank of America has renewed that with us. There is nothing else on the table. We have one more year. Our funds are limited. You realize in another year we will only have $500,000 and after that, it will have to come out of the general fund. I want to make sure you are aware of that.”

The council then voted. Kurt Goering, John Stima, Geoffrey Thomas and Mitch Ruth voted no, with Margie Rodgriguez and David Kennedy voted in favor of signing the letter of intent. Tony Balk was absent.

Before voting, Goering said he thought the deal could still proceed. But the mayor said later that she wasn’t so sure. “I’m not sure Sabey will be interested in anything more from the city, but if the council shoots it out from under us again, it’s totally dead,” she said. She and city administrator Tim Quenzer have been trying to smooth things over with the developer, she said.

Some citizens are organizing, hoping to convince the council to at least explore the option further.

“We’ve spent all this time to develop a retail center and attract a buyer, which has been difficult, for the properties,” said local business Dick Steimert. “The world is totally different than it was two years ago and to find a buyer is not an easy task, especially one with the means to buy it without trying to find financing.” He and others are planning to attend Tuesday’s city council meeting to to ask the council to reconsider.