By KEVIN ALLEN South Bend Tribune
2:15 PM EST, December 12, 2011
SOUTH BEND — City officials got more than they bargained for when they bought a dollar store on East LaSalle Avenue six months ago.
Four South Bend residents sued the city over plans to transfer ownership of the Family Dollar to St. Joseph’s High School, which needs the store property to finish an athletic field next to the new high school it’s building.
And a federal judge twice knocked down city officials’ attempts as unconstitutional, explaining they violated the separation of church and state.
The ordeal ended Monday at a South Bend Board of Public Works meeting, where city officials auctioned the Family Dollar property through a court-approved process, and the Catholic Diocese of Fort Wayne-South Bend was the only bidder.
The diocese, represented by St. Joseph’s principal Susan Richter, bid the minimum $545,000 for the property. The South Bend Common Council — which in June voted 5-4 in favor of spending $1.2 million to buy the store — could give the sale final approval at its meeting Dec. 19.
“It’s a relief to bring this to conclusion,” Mayor Stephen Luecke said after the auction.
Luecke said city officials looked at the Family Dollar purchase as supporting St. Joseph’s $35 million redevelopment of the former Saint Joseph Regional Medical Center site.
That private investment, he said, will be a boon to downtown and the surrounding neighborhood.
“We thought from the start that the procedures we were using were appropriate. Obviously, the court found differently,” he said.
“But we’ve been able to, with approval of the court, move through an auction process that still saved St. Joe some money over what they would have had to pay privately and reimburses the city part of what we paid,” he said. “So I think, in that respect, it’s positive for both of us.”
Despite the drawn-out process, Richter said it has been good for St. Joseph’s to have the city as a partner.
“We look forward to having continuing relationships with the city of South Bend, and we’re very grateful for their support of our project,” she said. “We’re just happy that we’re going to be able to proceed forward.”
School officials said construction remains on schedule. They plan to open the new school in August, and the athletic field will be ready before football season starts.
“We’re 150 days into the process of building the school, and they are right on schedule,” school board president Matt Edmonds said. “The stadium will start once the weather breaks.”
The city’s initial plan was to transfer the Family Dollar property to St. Joseph’s for $1. Under that agreement, the school would have allowed for some public use of the athletic field.
Four South Bend residents represented by the American Civil Liberties Union and Americans United for Separation of Church and State filed a lawsuit to block the deal, arguing it was a gift to the Catholic Church and therefore unconstitutional.
In September, U.S. District Court Judge Robert L. Miller Jr. ruled in the plaintiffs’ favor.
City officials then put the property up for sale with the condition that the buyer use it for purpose compatible with the school’s plans. Miller also ruled that unconstitutional, saying the stipulation favored the school over other potential bidders.
There were no conditions attached to the sale Monday.
City officials set the minimum bid of $545,000 in agreement with the plaintiffs, basing it on the $345,000 average of two appraisals plus the $200,000 the city paid to buy out the lease the property owner, Ada, Mich.-based Lex Lie Inc., had with the Family Dollar operator. The $1.2 million price the city paid also included the value of the business, based on revenue.
The sale does not include any requirement that St. Joseph’s allow for public use of the athletic field, but school spokeswoman Susan Lightcap said school officials want to be good neighbors and continue working with the city.
“We certainly will be taking those kinds of things into consideration in the future,” she said.
Staff writer Kevin Allen:
Copyright © 2013, WSBT-TV