MOREHEAD CITY — Following a due diligence period that was extended several times,the prospective buyers of Morehead City’s old city hall building on Arendell Street have backed out of the sale.
City Manager Ryan Eggleston informed the Morehead City Council during its monthly workshop Tuesday morning that Michigan-based AJK Acquisitions LLC had let the due diligence period expire, effectively terminating its $375,000 offer to purchase the building at 706 Arendell St. The company notified the city of its decision March 18, one day before the March 19 deadline marking the end of the due diligence period.
The city council indicated Tuesday it is still interested in selling the property, but did not take any immediate action to further that goal. Councilman Bill Taylor suggested the council meet at a later date to discuss its options and decide on a fate for the building, which the city plans to vacate once its new city hall on Bridges Street is finished later this year.
“I don’t know that we want to speculate in public about possible uses (of the old city hall building) because we might want to change the use,” Mr. Taylor said. “…I think that’s something we need to schedule in closed session and look at possibilities and avenues to pursue.”
AJK Acquisitions never shared its precise plans for the building, but Mr. Eggleston previously told the city council the company indicated it was looking into developing office spaces. Representatives with AJK Acquisitions could not be reached for comment.
The decision to rescind the offer put an end to a more-than-one-year process with AJK Acquisitions that started in February 2020 when the council agreed to declare the building surplus and authorized its sale. The council had an offer on the table from AJK Acquisitions at the time, but did not immediately accept it. As required by state statutes regarding the sale of public property, the city proceeded with an upset bid process.
AJK Acquisitions ended up being the high bidder on the property, and last July, the council agreed to an offer from the company to purchase the building for $375,000. A purchase agreement was finalized in October, after which the company had a 60-day due diligence period to fully review the property.
In December, AJK Acquisitions requested the due diligence period be extended by one month, citing COVID-19 travel restrictions as the reason representatives hadn’t yet been able to come view the property and complete building assessments. The city council agreed to extend the period until Jan. 15.
In the months following, AJK Acquisitions requested two additional one-month time extensions, for a final due diligence deadline of March 19. In February, the city council decided the one-month extension would be the last it granted. At the time, the council also had the company pay an additional $5,000 nonrefundable deposit.
In total, AJK Acquisitions forfeited $10,000 as a result of the canceled sale.
Contact Elise Clouser at email@example.com; by phone at 252-726-7081 ext. 229; or follow on Twitter @eliseccnt.