Georgia-based real-estate developer Wayne Johnson has rescinded his offer to purchase the former Wrangell Medical Center property and six adjacent lots from the borough.
Johnson had negotiated a new purchase agreement covering the parcels, but said he withdrew his proposal due to community concerns over the new deal. He blamed a Sentinel headline for stirring up concerns.
Johnson notified borough officials on Friday, June 28, of his decision to walk away from the project.
The Sentinel reported on Johnson’s requested changes to the land-purchase agreement on June 26 with the headline, “Developer now wants borough lots for free.”
Johnson said although the article itself was accurate, he felt the headline was a misrepresentation and damaging to his reputation.
The newly proposed agreement stated that Johnson would pay $200,000 for the hospital property, as per his original offer of this past spring. Then, after demolishing the old hospital building, he would receive the six adjacent borough-owned lots for free in exchange for the completed demolition.
Johnson had written to the borough in January, asking to purchase the six lots to give him enough room to build a housing development.
The original agreement between the borough and the developer stated that Johnson would purchase the six lots for their appraised value, which came in at $316,800. It included no requirement that he demolish the old hospital building or develop any housing on the land.
Johnson, in his June 28 letter to borough officials ending any deal, said the demolition, which he had estimated at around $1 million, would “provide substantial value to Wrangell far more than the value of the lots themselves.”
Larry Persily, owner and publisher of the Sentinel, said, “The headline was accurate. The story was accurate. Mr. Johnson's original offer to the borough was to pay $200,000 for the hospital property and fair-market value of $316,000 for the adjoining six borough-owned lots. The assembly approved the terms.
“But before closing on the deal, Mr. Johnson decided to ask for the six lots for free on the condition he would demolish the old hospital building, which he would have to do anyway to develop the property for his condominium project,” Persily said on Monday. “The Sentinel stands by its reporting as accurate and fair.”
The borough assembly approved the original agreement April 9. The new agreement was set to come before the assembly in a special meeting on Monday, July 1.
Johnson said in his withdrawal letter to the borough: “Since this article, with this headline, appeared I have now had several people ask me about it, and express concerns about our intentions. In light of our sole intention of undertaking this initiative to do something positive for Wrangell, I am beyond disappointed as to how the project is now being characterized and discussed, therefore the reason for our withdrawal.”
Johnson had planned to develop 36 to 40 two- and three-bedroom condos on the combined properties with covered parking and storage. He estimated the development to cost around $15 million.
Mayor Patty Gilbert said she’s “disappointed that Wrangell lost the opportunity to develop the old hospital into an economic driver for the community,” but that, “the city and borough will continue to explore other opportunities for the property.”
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