Judge stops Diamondhead City Hall purchase - WLOX.com - The News for South Mississippi

Judge stops Diamondhead City Hall purchase

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DIAMONDHEAD, MS (WLOX) -

A Chancery Court judge has put the brakes on Diamondhead's plan to purchase the old Baptist Church building currently operating as city hall. The judge ruled the $1.6 million bond obligation approved by the former city council for the purchase of the building violated state law.

Councilman At Large Ernie Knobloch was part of the former city council that approved the deal to purchase the former Diamondhead Baptist Church.

"The attorneys that we were dealing with said there was no problem at all doing this kind of thing. We were trying to lock-in this 2.21 percent interest rate for 15 years. So, I'm somewhat surprised," said Knobloch.

City leaders now have two options. Appeal the judge's decision or renegotiate a deal for the purchase of the building.

The original sale price for the church was around a million dollars. And the city wanted to borrow another $6,000 to renovate and bring the building into ADA compliance.

"I've looked at every possible option and I can not [find] a less expensive option than this Baptist church purchase," said Diamondhead Mayor Tommy Schafer.

Schafer said appealing the judge's decision would be much to time consuming and costly. He favors renegotiating the purchase deal.

"I don't think all of the renovations are necessary they are certainly not necessary right now and I do not want to put this city next year in a position or the following year where a significant mil age increase is necessary were going to work with what we have. We can perhaps better this deal by close to $400,000."

The only other option is to move city hall. Possible locations include strip malls in the area.

"The situation with the shopping center, if you took over, say, the old Rouses building, then you're taking it out of commerce, taking it out of getting sales tax in," Knobloch said.

He and other city leaders say making the current building work looks like the best option.

"It's kind of a difficult building to pass on, if we can't get the numbers right. We've got to look and see what our options are," explained Diamondhead Ward 1 Councilman Joseph Lopez.

City leaders will discuss the issue at their August council meeting.

Copyright 2013 WLOX. All rights reserved.

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