City, Hillside Ventures Discuss Contract

Since 2005, a countdown has been underway for the city of Sidney purchasing the building which has served as headquarters for Hillside Golf Course. The clock is still ticking, but how soon it will strike zero is up to different interpretations.

In February 2005, the Sidney City Council approved an agreement with a private group of investors, Hillside Ventures, which allowed the group to build a building that would house the city's pro shop, cart storage and a restaurant. Under the agreement, Hillside Ventures would operate the eatery, while the city would lease the remaining space.

The lease agreement, finalized in March 2005, was to run through October 1, 2019, at which time the city agreed to purchase the building back from Hillside Ventures for 90 percent of its appraised value. But in June, representatives from Hillside Adventures approached the city expressing the group's desire to terminate the agreement, maintaining that another provision in the lease provided it the opportunity to do so after 7-1/2 years.

The two sides met between closed council sessions in council chambers last week, the first formal meeting between the entities since the Hillside group approached the city in June. In that meeting the city, while maintaining the lease remains for two more years, indicated it would be open to negotiations over the property.

City Manager Ed Sadler at one point asked if the contract could be changed to present a more favorable outcome for Hillside Ventures to continue operating its portion (the restaurant) of the operation for the next two seasons. One of the Hillside group's concerns is the contractual requirement that the restaurant be open whenever the pro shop is. While the operation makes money in the summer, having it open in the winter, the low traffic makes it hard to turn a profit, particularly for those contracted to run the restaurant.

Because of its concerns, group representatives said Hillside Ventures investors prefer to terminate the agreements and wish to pursue the building's sale.

In October, the property was appraised at a value of $319,000. At the 90 percent agreed upon in the contract, it would cost the city $284,000 to buy back the property. While council agreed the city is bound by the contract, Mayor Joe Arterburn said he felt the appraisal was too high.

If the purchase were to go through, by normal guidelines the groups would have to have two more appraisals done at a cost of approximately $40,000 each. Sticking points for that approach include not only the cost, but the lack of finding "like properties" to compare.

Arterburn said he felt the city could offer $250,000, inclusive, for the property. That would mean the city would also be obtaining fixtures and equipment in the building, not just the building, as called for in the original agreement.

The building was built in May 2005, born from the need for facilities at Hillside Golf Course. The long-time Country Club, which served the community for many years, was purchased by a land investor, which burned the building down in June 1998 with plans to build homes in the area. That plan fell through because the land was unsuitable, and the city purchased the ground back.

Hillside Ventures, made up of 30 investors, then came up with the idea of the new building and brought it to life with $250,000 of investments and another $250,000 loan.