City Commission - Special Meeting

I'm calling to order the special meeting of the Birmingham City Commission today, Tuesday, May 19th, 2026 at 5 p.m. We are in City Hall at 151 Martin Street, Birmingham. Please join me in standing and saying the Pledge of Allegiance. I pledge allegiance to the flag of the United States of America and to the republic for which it stands, one nation, under God, indivisible, with liberty and justice for all. Thank you. Maya, roll call, please.

Thank you. Mayor Ballard?

Here.

Mayor Pro Tem Long? Here. Commissioner Kolb?

Here.

Commissioner Host?

Here.

Commissioner Kozlowski?

Here.

Commissioner Haig? Thank you.

And calling the roll tonight and sitting in as city clerk is Deputy City Clerk Maya Brown. Before we get to the business at hand, I'll open it to the public for matters not on the agenda. If you're in the room, approach the microphone. If you're online, use the raise your hand function. This portion of the meeting is for comments on items that are not on the agenda. We'll allot three minutes to comments now and during the meeting on any comments that might be made on agenda items.

Hi, David Bloom, Birmingham resident. My two questions are followed by a comment, and they're all related. Assuming that the purchase goes through, who is going to be running the community house and how? I understand that there's a community foundation that may be set up, and there are quite a few well-meaning people that support doing this and support running it. We got into this mess, meaning our community, in my personal opinion, because of gross negligence on the part of board members who thought they were in a country club and the community house not doing their job managing the money and providing proper oversight. So if we take on this responsibility, meaning our community, who is going to do it? Are people going to be qualified? University of Michigan offers free nonprofit board training. Anyone on this board needs to be certified by something. We need to have some kind of accounting audits to make sure that it's properly being run because now we have taxpayer money, a lot of taxpayer money at stake, and we don't want to have the same problem again. Even if people are well-meaning, It doesn't mean that some people are willing to make the tough choices needed to run them To run the place so they don't run it into the ground.

Thank you Thank you Any other comments? Seeing none, we'll move on to our new business, which is a resolution authorizing the purchase of 380 South Bates and to execute the purchase agreement between the city of Birmingham and the community house and to direct the city manager to pursue and implement the necessary steps to keep the community house operating and staffed during the ownership transition, including but not limited to ensuring the continued operation of the childcare facility the building presenting for us today is Kathleen Martone who has worked is with Mark Varnum and has been with us since day one

Good evening mayor and good evening city commissioners. Hope you've had a nice 18 hours since I was last with you today I am here to present for your review and approval the purchase agreement for the acquisition of 380 South Bay Street commonly known as the community house The purchase agreement if approved will guarantee the preservation of the community house building and grounds as well as the community events and programming that have been offered at the community house for the past century As you know, this transaction arises out of the City of Birmingham and the Community House Association's Circuit Court case in Oakland County, as well as the Community House's subsequent filing of Chapter 11 bankruptcy in the United States Bankruptcy Court in the Eastern District of Michigan. And over the past several months, the city has been negotiating with the community house to purchase the property as part of a potential settlement of those matters. The parties to the agreement are the Community House Association of Birmingham, Michigan, which is a non-profit entity as the seller, and the City of Birmingham and an entity to be formed as authorized by this commission last night, the City of Birmingham Community House Foundation, for the purposes of maintaining and administering the building moving forward. I'd like to walk through briefly what the purchase agreement says, and I'm happy to answer any questions that you have after we've walked through the major provisions of the agreement. The property, again situated at 380 South Bates, includes all rights, easements, privileges belonging to the property, including any mineral rights, water rights, air rights, and all fixtures and improvements, aside from those accepted on Exhibit A to the purchase agreement. The sale also includes the Marshall Frederick sculptures currently located at the property again all fixtures except those exhibited or accepted on exhibited a Includes maintaining the name the Birmingham Community House and includes all books and records related to the operation and maintenance including the ECC and banquet center employee rosters operating expense histories vendor contracts donor records and gift restrictions The purchase price offered is $5.2 million with a $100,000 earnest money deposit due within five business days after the effective date to be held by ATA National Title Group Seaver Title Division. the payment method is immediately payable funds at closing and there is an endowment hold back if the community foundation for southeast michigan which i will walk through momentarily does not improve the division of the endowment funds there is a hold back in escrow of half the amount of that endowment to be paid into a donor advised fund or similar vehicle if the division by the community foundation for southeast michigan is not effective again let's walk through that endowment division very briefly

A commissioner is asking if he can interrupt with questions.

Absolutely. In the document, you outlined we're estimated at 800 grand.

Yes.

Through the process and our relationship with them, that's an assumption because we have no idea what actually yes that that number isn't since that belongs to the residents of birmingham we have any way to go back and validate what the starting number is absolutely commissioner called okay if you look at paragraph 24 of the purchase agreement it contemplates 50 percent of the then current value of the endowment

And so there is flexibility there. $800,000 is just our estimate based on the bankruptcy filings and the estimate of the endowment funds to date. But since all books and records are included, that would be something that we would want to verify what the then current value of the endowment is for purposes of that 50% division.

And then if we find out it's more, that $800,000 would go up in what we put into escrow.

It has to be 50% of the then current value of the endowment. So if the endowment is $2 million, the 50% is $1 million.

Perfect. I actually interpreted your question differently. I thought you were asking, how do we know the history of this endowment and whether maybe there was $3 million in it at one time?

And now they're telling us. I asked the at the top. That is absolutely underlying us.

Understand the question that the Community Foundation for Southeast Michigan controls that endowment through their endowment policies and they issue they have through the endowment agreements It was originally established in 1993. So I'm sure the value has changed over time, but through their investment policies They distribute a certain dollar amount every year to the beneficiary, which is currently TCHA But based on that division will be 50% the city of Birmingham Community House Foundation and TCHA However, they may continue moving forward.

Okay

Other than investment losses, generally the principal cannot be touched. Thank you.

And are we clear yet on whether we're getting, we can get that principle, that $800,000 and do what we want with it? Or do we have to leave it in an account?

That's a good question, Mayor Ballard. So we'll be obligated by whatever the Community Foundation for Southeast Michigan's endowment agreements are. And typically they issue, again, it's typically like a 3% to 5%. I haven't reviewed the exact endowment agreements for what the annual distributions are, but The idea is that it maintains in perpetuity and issues a lesser amount than what you would think average growth is, and that money annually would be used for the maintenance of the building or whatever the ultimate foundation owning the building will deem necessary for the continuity of the house in general. now if the community foundation for southeast michigan and their board of trustees does not approve of that division and again that will be done by a letter from the community house association as part of this agreement is they will we will hold that letter and escrow and deliver that to the community foundation for southeast michigan i understand they have a june meeting but that agenda is full and so this likely won't occur until after the closing date so they will repress that letter but of course we don't control the Community Foundation for Southeast Michigan's Board of Trustees and if they do not approve of that division of the endowment then that's what the escrowed funds are to be used for and there might be a little more flexibility with regard to the use of that funds and how much we can get every year if it's in a donor advised fund as opposed to held by an endowment by the Community Foundation for Southeast Michigan.

One more question, then you can continue. Why would a nonprofit put their money in an account with the Community Foundation of Southeast Michigan that they could then not really have control over?

Well, part of it is there's a lot of rules and regulations behind having an endowment fund and the reporting obligations with regard to those endowed funds. And so the Community Foundation for Southeast Michigan has a long storied history of doing great things for this area. of michigan and so they have a very adept board of trustees who manage these funds and invests them properly and so the idea is you put the money with the community foundation they kind of handle all the back paperwork and things that need to be done to make sure that those investments are managed properly the endowment continues to grow and the organization essentially gets gets

kind of think of it it's not an annuity but you can kind of think of it in similar terms in terms of receiving a stream of income for life so less sophisticated nonprofits would be doing that is is that something and promise last question is that something the city of Birmingham would do if we had a choice

We could certainly explore that as an option, but it wouldn't be the city of Birmingham. It would be the city of Birmingham. Understood. Community House Foundation could explore having its own endowed funds, but again, that would be, you know, there are a lot of rules and regulations and paperwork behind that that could certainly be explored if the new foundation was interested in doing so.

Okay, thank you very much. Can I ask a quick follow-up? Sure. Just to be crystal clear, and then, so there exist... some restrictions about how we can use this money, but the Community Foundation for Southeast Michigan will no longer be involved after they divest this, if they choose to. They will still be involved in the management of those funds. They will just exist in a separate partitioned account.

So the idea is that there would be a 50% endowment for the city of Birmingham's community house association at 50% endowment for, um, the, the continuing entity for the community house association or whatever version they are after June 30th. I'm unclear on that, but all I know is the 50% for the community house, uh, the city of Birmingham's community house foundation that would be controlled by the community foundation for Southeast Michigan. A lot of community endowment words, but essentially it would continue as is. with the Community Foundation for Southeast Michigan as long as their Board of Trustees approves of that division. Now, if they don't, then the 50% of the funds that are going to be placed in escrow upon closing will then be used in a donor-advised fund or a similar vehicle that may have a little less restrictions than the current endowment held by the Community Foundation for Southeast Michigan does. Okay. But the idea is first the division of the endowment.

Yes.

well I think I've exhausted what I was going to say on the endowment so if you've any further questions on that I'm happy to answer them but just very briefly about the other contingencies and conditions with regard to this purchase agreement so of course this is subject to approval by the United States Bankruptcy Court so the idea is if the City Commission approves of the signing of this purchase agreement today a motion for sale will be filed in the United States Bankruptcy Court ideally tomorrow moving forward with the sale process the seller must obtain owners policy title commitment within five days of the effective date and the effective date is the date that the last party signs this agreement so it's the date that the city of Birmingham signs the purchase agreement there are due diligence and inspection periods the city has until 5 p.m. on June 15th to review and inspect all physical aspects of the property including building inspections and environmental And the city may terminate the agreement within the due diligence period. There are 10 days to raise title objections after the title commitment. The city may obtain a survey at its own cost. I'm happy to run through kind of the timeline, but they are spelled out pretty clearly in the agreement with regard to the days and the amount of days after the effective date with regard to EMDs, title commitment delivered, the effective date, and so on. Importantly there is an exclusivity provision so the Community House Association as a seller may not solicit initiate or encourage any competing offers after the effective date again the date that the city signs this agreement and that the city may assign this agreement without sellers prior written consent so the agreement can be assigned to the new city foundation. Closing costs will be split equally as far as title company charges go, but the seller, the Community House Association, will pay all taxes, title policy premiums, and broker commissions, including the civil broker commission for which they engaged previously. No prorations through the date of closing. The property condition is as is. However, the seller must maintain the property in its current condition as of the effective date of this agreement. Filing the closing date, the parties will execute mutual releases and file a dismissal with prejudice in the Oakland County Circuit Court litigation matter and release the notice of lease pendants, of course, to be able to effectuate that closing. Again, the idea here is continuity of the community house and its programming. So continuity of its historic history and expand the offerings that the community house has historically offered and bring folks back to the community house to be able to maintain its storied history. Happy to answer any questions that any of you may have.

Commissioner Cullen. So as I recall in reviewing the bankruptcy documents, the city of Birmingham was a creditor How does that get dealt with? I think there were three different items that they owed us money for. Do we deduct that from the purchase price? Do they pay us once we close? Does it just go away?

I'm going to rely on my bankruptcy expert sitting right behind me to answer questions.

When they receive the sale proceeds, they'll pay all the creditors.

Yeah, so if we are accredited. It'll be in line with all the other creditors. Correct. Okay.

Well, I would ask a good question. Generally in bankruptcy, or not generally, but sometimes when a company declares bankruptcy, the creditors don't get everything they're due.

What's happening in this case? So the purchase price, though, is well beyond what the creditors that they have filed are. So here are all the creditors' claims should be satisfied based on the $5.2 million purchase price. so we had the opportunity to perform various inspections on the building what happens if we discover that the condition of the building is considerably worse in some manner than we had anticipated so there is the period to be able to withdraw from the due diligence period there is $100,000 earnest money deposit that is non-refundable except in the instances that one of the representations and warranties have been violated so there would be a look at to see whether that

Reason for withdrawing based on the due diligence period violated one of those reps and warranties if it did not then that earnest money deposit is considered non-refundable Okay, but it would be it would more or less we would just back out of this entire agreement and we would have to renegotiate perhaps not from scratch but we would potentially renegotiate a new price. There is not flexibility within this agreement to sort of say, well, we're not going to pay you 5-2 because it has X, Y, and Z issues.

I think there is room for that, but I think that if you do not move forward with this purchase agreement for any reason, you risk some of that exclusivity provisions that are in the purchase agreement, and you might open it up to other negotiations. Okay.

I have some questions about the inclusions and exclusions. First, a very simple one. There was a board table and chairs. My recollection is there's a board table and chairs upstairs and a board table and chairs downstairs. As I recall, the one upstairs is quite opulent. I don't know about the one downstairs.

I understand that both board tables will be included.

Oh, included, so no longer excluded. Correct.

Excellent. Correct. That was in your email from about 20 minutes ago.

The other question is about the records. Clearly, we're buying a building. My preference is we're buying as much of the institution as possible. That institution includes a lot of records, whether they're financial records and whether they're on paper or digital. Financial, there's donor agreements, things of that nature. To what extent will our due diligence reveal what exactly is there and what we're getting? And how can we ensure that we get as much of that stuff or all of that stuff that exists and that nothing is left out? And I would add that part of that process would be brainstorming what ought to be there.

I am yeah I understand mayor so the purchase agreement does include all books and records and that doesn't delineate between digital books and records or physical books and records certainly part of the motivation is to receive the books and records to know what the operating costs are and is something that we would be pursuing as part of the due diligence period but also seeing the gift agreements because part of the city's motivation as I understand it has been to maintain the continuity of those those donors that have given to this association over the past 100 years so all would be part of the due diligence period that we would continue to request.

But I think you're also referring to historical things like photographs and things like that.

Sure, I can imagine that an institution like that has amassed a lot of stuff. Even to the extent that they might have off-site storage.

Well, I can't speculate on what they have. I certainly don't know firsthand knowledge of what they have, but it would certainly be requested as part of the due diligence period.

And will that be reported back to us? Certainly. Other questions? Comments? Mr. Cole?

So in the memo we got from you, Jaina, one of the items that are one of the provisions outlined is the continuation of early child care center fine bacon Center got questions on that one all over the place and then other community programming so on the banquet say in the center based on the 990s they were losing a million dollars a year in cash If we decide we want to discontinue that, if we do with that included, do we have to continue that ad infinitum?

No, I don't think that there's an ad infinitum provision on here. I'm going to pull up the exact language if you give me a moment on there, but it's best efforts to continue the programming as is. And so if there is no sustainability for those banquet facilities moving forward, there's no line item that has to be continued. But the goal here is to maintain the programs that have been at the community house historically. But if it's a losing proposition, that's something that the new foundation as the new owner will have to consider as part of its operations moving forward.

And then I follow up to that is, do they have a Class C liquor license? They have some kind of liquor license.

Yeah, I'm not familiar with the exact class of liquor license. I believe it's a Class C, but I don't know that for a fact.

And would that transfer over? The former police chief is nodding his head, yes, it's a Class C liquor.

So in the purchase, do we need to specify that that transfers over with the acquisition? If we're going to continue operating the banking facilities, it would seem we would need to. Good question. That is a good question.

The answer is yes.

The answer is yes.

And it's in the purchase agreement? If there's a change in ownership, then the license has to be transferred.

It's tied to the property.

It has to be transferred, but... Unless it's not being sold. Because that's a separate asset. It's one of our, what do they call it? The 17 or 19 quota licenses, right? So they couldn't take it out of the city. They could ask us for more money for it. Surely it should be explicit that... That if we're going to maintain banquet operations...

I agree that that's essential part of it. Yeah.

I have one last one and then I'll shut up. Are you? I'm just doing a quick review to see if it's explicit anywhere in here. I've reviewed this many times, but I can't recall where everything is.

If you need to make a quick phone call.

to the opposing attorneys.

I know that their liquor license was renewed this year for a year.

Thank you.

Next time, call us at a time when they ask questions. Okay, sorry. Yeah, I agree that that's the catch-all. In terms of license rights? Mm-hmm. and licenses and agreements to cooperate and facilitate and advance their documents.

Brendan and I are just discussing provision 32 of the purchase agreement which talks about use and occupancy and there's an agreement to cooperate with the purchaser of the city to facilitate discussions and perform other work necessary related to the preservation, stabilization and transition of the banquet center and ECC to the extent reasonably requested by the city as the purchaser. So I believe that that would well fall within that provision of section 32 of the agreement. Okay.

Last question. And this is kind of a hold harmless, protect us. Given the history of former leadership and the negotiated settlements that seem to have remained, as we heard during the bankruptcy part, are we protected as the city if Bill Seckler comes back and wants something?

Bill Seckler and any resolution with the current Community House Association has nothing to do with the current city.

Okay. That was it.

Is there a need to make a phone call about that liquor license while we discuss other matters? Just to, like, nail it? Yeah.

Yeah. We will. We have discussed that with them, so I'm confident that that provision covers it, but it is something that has been discussed and agreed upon.

You can always find an excuse to... okay comments questions further comments further questions we can either do a motion and then go to the public or we can go to the public what's the Commission's pleasure yeah the public go to the public if you'd like to make a comment stand up come to the microphone

State your name city of residence and fire away three minutes David Stanislaus Bloomfield Township my question has to do with records that The Community House has collected over the years particularly during a recent period of time Is there any assurance the records have not been destroyed? or in any way would not be available to the city in the event that this purchase goes through. Are there any representations at all about that?

Yeah, there was a litigation hold filed so as part of, as soon as the complaint was filed, there is a non-destruction of evidence as soon as that case was filed and I believe that was back in late October, early November.

Thank you. Well, I would add prior to that, there was quite a bit of upheaval there. You know, you had Camille Jane coming from out of town and talked to board. The board released Mr. Seckler. So a lot going on in the year or two prior to that. So my question was, have they made any representations in the purchase agreement? About records.

That we are entitled to the books and records as part of the due diligence process. Okay. Nothing about saying they hadn't destroyed anything. That wouldn't be a standard term that we would have included.

Other comments? Public? Come on up. It's a race.

You win. Edmund Aronowitz, Birmingham resident. Why is the city paying for an asset if said it had the right to buy for a dollar in its prior litigation?

I'm not sure we said we had a right to buy it for a dollar. That wasn't part of it, but I'm gonna defer

Why is the city paying? Why is it abandoning its claims as a certain Oakland County, even though there stayed in the bankruptcy action when it had to write under the deed restrictions to do something with this property?

A lot comes down to money and how much it's going to cost, how much it has cost and what it will cost under this scenario, and how much will it cost if we litigate. And those costs include, of course, more legal fees, the likelihood that we... have to assume some or all of their existing debt and lost time, like a year. Thank you. I hope that satisfies you. Was that a fair answer?

Yes, and litigation is never sure. you can step into litigation having a belief of your position and your side, but there is no guarantee. And I think the bottom line was for this commission and the manager's office. The community house was a public asset that this commission and manager's office wanted to make sure would never leave the city of Birmingham. And this gives finality and surety that this asset will remain the city of Birmingham's into perpetuity for the sole purpose of serving its residents.

And I would just add one more thing, and I would ask the attorneys to chime in if they want, but the filing in bankruptcy court, of course, changed that, our original litigation as well, and different things can happen in a bankruptcy court that wouldn't necessarily have happened in the regular circuit court, so it kind of changed things as well.

That satisfy you? I mean, your question is one that is being asked, so it's representative of a lot of people.

I believe the underlying concern is Based on the filings in the bankruptcy, it looked like Community House Association was in debt or had encumbered the building with something like a couple of million dollars to Chief Financial Credit Union. Now they're attempting to sell this asset for $5 million, presumably to pay off the debt, fine, and to create additional money to be used for some kind of charitable enterprise, when the bankruptcy filings show that the Community House Association only distributed a couple thousand dollars for the last couple years. I don't understand what they're supposed to be doing with the extra money and why the city of Birmingham has to use taxpayer funds to endow this new association to basically be a management company to give away someone else's money.

Would you like to respond?

As carefully as I can because of the agreements in the purchase agreement. Again, it comes down to a tightrope balance. Anytime you're in litigation, while we can think, again, that we have everything on our side, including in the bankruptcy court, one can never know what the future's going to hold, and one can never know what the bankruptcy judge is going to do or not do. What we knew with certainty is that there is a cost to this building and how much does it cost in time, litigation and surety to the residents. continue to hold and have this asset forevermore if we had gone down the paths of litigation both in the bankruptcy court and through the Oakland County Circuit Court and something happened where we lost we'd be answering to the residents of the city of Birmingham of how could you have let our house be taken away from us So a hard decision was made again by this commission along with manager's office and our experts to balance what was the needs desires and wants of this community and while the resident is correct there's a chunk of money being left over to seed the foundation for this other entity into the future We've made the decision that this is what's best for the city of Birmingham forevermore. This also makes sure that this situation never occurs again because now this building will belong to the foundation created by the city so that we are never in a position again of potentially losing this house. And that was worth the extra $2 million to this commission and manager's office and advice of council. So is it expensive? Yes. Is there some money going to seed another foundation? Yes. But the balance put us in the position of wanting to have negotiations that are sure is saved of litigation.

Thank you. Other comments?

Hi. Two questions. David Bloom, again, Birmingham resident. I believe the community house also has a catering license and the right to serve alcohol off premises. I don't know if that's part of a standard Class C license or if that's an addition. That would be an asset if it is a separate asset that we don't want to lose. The second thing is the seed money that the former community house people are going to be getting, approximately $2 million. Do we have any assurances? And if you don't, or do you have the ability to make sure that this money does not get misused and used for personal purposes in terms of high salaries or anything like that being paid to the people that manage?

Well, I will address that question. The second question, we have no power to do that. No more than you do. So... The name of their foundation is, I believe, the Community House Foundation. Whatever it is, Birmingham is in the name, and you're a Birmingham resident. And all of you have a duty, just like we do as citizens, to hold that foundation to account, just like you're going to hold us to account.

Thank you.

Just a clarification question I have as a relatively new resident of Birmingham, Michigan. And your name and your name? Oh, Kat Hardy, H-A-R-D-Y. So here's my question. And other people have asked this question and they've asked me. I don't have the answer to this question, but you do. I do not understand... We do not understand why the city of Birmingham has to buy a house that was deeded to them in 1930. Wouldn't the ownership be the city's all alone?

I understand the question.

All right. If so, you have a seller. who is going to get $5.2 million. Who is that seller? If it's not the City of Birmingham, who owns the community house? I know you've tried to answer this to a certain extent, but not good enough for me. I'd like to know where that money is going. You are paying money for something you already own and that just doesn't make sense. So help me out.

Okay, so the community house way back before there were additions made to it was deeded to a trust. Okay, it was in trust and and then they they added on to it and it became roughly what it is today in 1989 that trust was dissolved with the Consent of the court and the Attorney General's office which oversees public trusts. It was dissolved and the property along with the deed restrictions carried through, was turned over to the Community House Association, a 501c3 nonprofit. The city never had ownership interest in it. As a public trust, one might argue that the residents of the city of Birmingham had an interest in it. But apparently there was not sufficient opposition when the trust dissolved and turned the property over to the association. There wasn't sufficient opposition to stop it. So it went to the association. And the association was then run by a board of directors. And it is that board of directors and their successors and the management's successors that have engaged in, who have decided to sell the building, to go off and create a new sort of entity that would give money to other nonprofits and scholarships. That's who's going to get the money. You can look up the board of directors. There's five or six members. Their names are public. They're on the Community House Association website, as is the name of the president of the community house, who I believe is probably most days sitting at her desk across the park. but there's never been ownership by the government, the city of Birmingham in this property. As I said, arguably, the citizens of Birmingham had an interest. I hope that answers your question.

That helps, except that who appointed those board members?

Well, each other, the president, their bylaws are not public. They have not made public. The public information that comes out of the community house is pretty much confined to their IRS Form 990 filings. They don't. They're not required to hold their meetings in public. They're not required to release minutes of their meetings. They are accountable to the Attorney General of the State of Michigan. Anybody, all these lawyers sitting here, if I'm saying anything wrong, correct me, but they are not accountable to the city. You might say they're accountable to the citizens, but there was not really a groundswell of citizens at any point in this process in opposition to this and voicing their opposition in such a manner that would cause this board to take note.

All I can say is this. I've never heard of such an extraordinary thing happening in a community. Maybe it does in other places, but this is kind of far-fetched because those were not elected by the people. They're not responsible to anybody but themselves. So if they have an enormous debt that must be paid out of the proceeds, let's say 3 million, then they have $2 million left over. Do they divide it among the six of them?

I just wonder, if I may, there is a booklet that's been referenced on the Birmingham website called The Heart of Birmingham, which gives a really nice account of the history of the community house. So if you take the name Birmingham out of it, it's called the community house. It is the detailed story and history of how this property was developed, who ran it, who owned it, how they managed it. And in that, if someone were to read it, you will learn that the city never had anything to do with it, despite its name. And 501c3s across the state, they set up their board of directors and their bylaws independent of anyone else, just like our foundation will. So this is the 501c3 setting up its own board and managing its own 501c3 was the normal course of business for 501c3s. They're not accountable to government. They're accountable to the Attorney General.

And the final question is originally in the 1930s, it went into a trust, but at that point, could it have been deeded to the city?

That would have been up to the trust.

I'm just wondering why did they decide to put it in a trust and not just give it to the city? And my last question is...

If we could have gone back 90 years ago and talked those people who donated to donate it differently?

Okay, my last question is would it have been possible for the current board to have just said we are giving you the house

Absolutely. It's even in writing where they could have leased it to the city at a nominal price. That was the wording.

And last question.

Wait, the last one was the last one.

I know.

Go ahead.

You just got me fired up.

You think you're fired up?

I guess a lot of people in this room were fired up and as well they should be. And so you know what you did? You made me forget my last question.

Well, you get a pass if you want to come back.

If I may?

Yes.

You know, everyone is feeling a lot of things and they're fired up. I'd like to suggest that proactively we get fired up about the future, right? And what this house is going to look like for the residents. And fired up about the good work this commission did. And fired up about what the manager's office did. And let's put our energy there. Couldn't help myself, Mr. Mayor.

Mr. Mayor, George Dogard, 1619 Fairway. A couple of multifaceted questions. First off, the $5 million, is that going to be coming out of the unassigned fund balance? And if so, what effect will it have on our target of being in the 17 to 14% range of expenditures?

Good question, City Manager.

Yes, it is proposed to come out of the unassigned fund balance and we will remain within that 17 to 40 percent target right now We're at the upper limit. It will go down into the mid to low 30 percent. So not near the bottom at 17 percent.

Okay, so Basically taking us back to where we were three years ago Okay Second question are there similar public charity foundations in Oakland in Wayne County and If so, what are they and how long have they been in business and what are their success rates on raising donations and funds? Thank you. Okay. On that one, I'm going to defer.

I will say Royal Oak does have their own charitable foundation. We don't know all the details on their background and their success. Unless you do.

Yeah, I can't speak directly to what the Royal Oak Civic Foundation, but there are civic foundations across the state of Michigan that operate for good purposes for city governments and grant making for good purposes to be done within communities. This one is specific to the community house. I don't know that there are other similar organizations that are designed to own a community building to be used on behalf of the city of residents, the city of Birmingham residents. So to say that they're exactly similar, I don't know that there's anything exactly similar to this.

Thank you. I'm Linda Solomon, 639 Purdy. I want to read a quote because it has to do with how I feel about all of you. John Stewart famously stated, if you don't stick to your values when they're being tested, they're not values, they're hobbies. mayor baller commissioners city manager city attorney i want to thank you for standing up for values for us as a community the community house is the heart beat of our city and each and every one of you are standing up for us so even though you were tested you proved to us your values are not hobbies you care about each one of us and my gratitude is to all of you. We formed a group many of our members are here tonight called the visionary arts Council of Birmingham you can raise your hands and show the others in the audience who you are. But we form this group with the sole purpose to maintain the heart of Birmingham, the community house. When it was announced in November, there was going to be a sale. I read something on Facebook from someone I do not know, but I want to read it to you and I quote. in line with my mom' s wishes we will be holding a celebration of life for her at the community house in birmingham. This is a location close to her home of 40 years it is where she took us kids for day camps and piano recitals. This is where my mom married my dad and depending on how you believe my mother passed away on my parents wedding anniversary so that's what the community house means to all of us here it's your house it's his house it's my house and because of all of you we can still say that. So I really want to thank you. And you make me proud to live here. I've lived in Birmingham, well, don't want to talk about age, but since 1965. But I've never been more proud. So thank you, thank you, thank you. And again, for standing up for values. Thank you.

And you're welcome. Sir. Good evening. Greg Woodell, 1543 Dorchester in Birmingham. First off, I want to echo the thanks. The community house has been part of our life when we've lived in Birmingham over two stints over 30 years. Our kids took classes there. We took cooking classes there. It's an important part of the city. I want to... This meeting is about the purchase of the building, and yet I think there's, I want to understand more as a resident what happens after the purchase. We are now as a city, as a foundation, going to be running a banquet center, an early childcare center, Managing employees, how many employees are going to be added? What happens to the existing employees? Will they be retained? Where do the operating costs to run the institution in the future go? Are they budgeted? Are they coming out of city funds? Are we seeding this foundation with additional funds to run it? I'd like to understand the operating structure as proposed and what you may know about it at this time.

I can't say too much. I can tell you that plenty of thought and discussion has been brought to bear on all of those questions, and we are very confident it's not going to be without some costs. We wish that we were buying an ongoing operation, but we're not. We're buying an operation that We were told it's going to close, and it's going to close. We're going to get a building, but I can tell you it's going to be up to the foundation. The foundation hasn't even been formed yet, but we're doing everything we can so that the foundation can hit the ground running. That may not satisfy you entirely, but you can rest assured that work is being done.

And I appreciate that, and I understand, you know, there's a sequence of events here, but I just want to sort of focus on, we talked about what the purchase price will do to the city's budget and coffers, and I want to make sure that we're thinking about what happens after the purchase, and we're running a new organization that we as a city don't have experience running. We absolutely are thinking about that. Thank you. Thank you.

My name is Jim Soule, Burma resident. I support the purchase of the community house as you laid out. And I think it's, you know, I've been following this for the last year. I was on the board here for eight or nine years back when it's back in its glory days. And I've been a supporter ever since. You know, I love the community house. But this last gentleman just sort of Stole my thunder About what happens next but let me let me ask ask some specific questions regarding what is what is next now, I know from my experience that the community house is a complex organization and it's and it's difficult to run and it's been Exhibited here by the fact that it's a shadow of its former former self and Now, in November, when this was announced, that the sale was going to be announced, I remember the management of the community house was quite proud of the fact that they'd be around for six months. And one of the objectives was to give the present staff time to find new jobs. So that's going to be one of your problems. And I'm a little concerned about how you're going to hit the ground running when first of all you've got to You've got a point board of directors and the board of directors in has it has to do some sort of a search for a new CEO and I just don't understand how you're going to hit the ground running with all of this to do to staff establish the governance and management of the other community house. So can you go into a little more detail how you're going to hit the ball running and keep as much of the present staff as you can because you're going to need them.

Yeah.

No, I can't.

Sorry.

Good luck. And really, honestly, good luck.

But I just worry about this transition. I can understand your concern. I totally understand your concern. And I can also tell you that we're confident that things will be okay.

Thank you.

You're welcome. Other questions, comments? Anybody online? We have several hands raised. Adrian Carey. Go ahead and unmute yourself. You should be able to get through.

Hi, can you hear me?

Yes.

Hi, my name is Adrian Carey. I'm a Birmingham resident and my son goes to the early childhood center at the community house. My question for you is, you know, in reading the Facebook post about today's meeting, it mentions discussion of continued operations of the ECC. And my question for you is, what does your vision for the ECC look like? What is your plan for continued operations? At this point, care is supposed to stop May 29th, and several parents are trying to figure out alternatives for their kids. children, myself included. So if you're able to comment on, you know, if care will be continued after May 29th or provide any insight, that would be appreciated.

Okay, so the insight that the best I can tell you is that our goal from day one has been to as much as possible see that the ECC continues without interruption. we have attempted to engage with the existing management of the community house and not had much cooperation. So that being said, There's at least one person who was in the room, but she's not here anymore Kristen bounty who has been trying to be something of a liaison between the city and you and the other parents and I don't know to what extent with The the management of the community house I But our hope is that the existing staff, including the director, would maybe be watching right now and understand that we would like to talk to them as soon as we possibly can, legally or morally or whatever. We think morally, the time is long past, but legally. I'm getting the evil eyes. I think. So the message to those people is we wanna continue with what's going on there. We know the demand for that service is enormous and we know the anxiety that you have experienced and we feel your pain and we're gonna do everything we can.

They're part of this agreement and coming from the community houses. You know, we've reached this agreement when this motion passes that we are to start actively engaging. In fact, part of your suggested action tonight is to direct the manager to pursue and implement the steps necessary. ensuring the continued operation of the child care facility in the building. So the community house is saying, yes, now is the time and you're going to direct the manager to do so. So this is the appropriate time.

It is. And I do have to add that, not being an expert, but that there is going to be a change of ownership here. And the state has some say over what occurs with a daycare when the ownership changes in terms of licensing and all that. So we're going to do our level best. All have been doing our level best the entire time. Does that help?

Yes, it does. Thank you. I'm just wondering, kind of based on what you're saying, it sounds like there might be a lapse in care, you know, between the time the community, based on the timeline of the purchase agreement.

I think there might. We cannot say, I cannot tell you there won't be. Not tonight at 6 o'clock, whatever the date. I can't tell you that. I'm sorry. I wish I could.

That's okay. Thank you.

Okay. Haley, I'm sorry, I don't have my glasses on. Haley? Robothumb. Robothumb. Just unmute, Haley.

Hello, can you hear me?

Yes, we can, hi.

I'm just curious on what your plans are for retaining employees as many of them probably about 20 or 30 employees have been anticipating unemployment come the end of June 30th. And many of them have been seeking work, but many of them also have decades of experience at the community house and would be very valuable. So how long do you think it will take before you start looking to hire on these employees?

Tough question. I mean, I think once again, we got to take it step by step. We're not delaying anything. I can tell you that. And as soon as this agreement is executed and the city is able to work with the community house management, that's when the ball will continue to roll. I know that's not probably what you wanted to hear, but... You good? I think she's gone. Okay. Ana Ratiu? Did I say that right, Ana?

You did. Hi, I'm Anna. I'm a Troy resident, also another ECC mom. I know that you said that you can't say if there's gonna be a lapse in care at all, and I totally get that. Would it be reasonable to say by the end of the month you'd be able to know if there's gonna be a lapse in care? Just because I know a lot of us have already paid pretty hefty deposits for other childcare facilities. and we need to, if we have to cancel those plans, let them know so we don't forgo even more money. And as you probably know, childcare nowadays is really, really expensive. So it would be really helpful to know sooner rather than later.

Anna, I'm going to tell you that the management of the community house, including the director of the ECC, is probably far more knowledgeable at this point about how that's going to play out than we are. Their doors, I assume, are open to you. Okay, we have Mr. Hohendorf had his hand up, but he's...

He's still there with his hands down.

David Hohendorf.

I'm a resident 631 Northville Woodward.

I own a business in the community. George Dillgard tackled my most concerning question as to where the $5.2 million was coming from. I understand the process of holding closed sessions during negotiations on this purchase, but I would urge the City Commission, as you start to discuss a plan for making the community house a self-sustaining entity that these discussions be done in public um 5.2 million of our taxpayer money is going into this purchase and i really think that closed sessions on discussing how long it's going to take to make this self-sustaining should be done in public. My last question, though, is at some point, do you envision having to ask

To your first question, I believe henceforth everything will be open as it pertains to the Birmingham City Commission. The foundation and its board and its committees are another matter and that would be up to them whether they're going to hold their meetings in public. We have not even adopted or seen bylaws yet. those bylaws can be amended by the city commission and then once they're turned over to the board the city commission could further amend them or can the board amend them the board will not be able to amend whatever bylaws we put in place we as the sole member of this non-profit foundation control not only the bylaws but the board of directors. We can remove individual board members or we could remove them all and start fresh. However, we do not... You could require open meetings? That's something we would have to discuss, yes.

We can attend BSD board meetings by Zoom. It would seem like if the foundation board is going to make decisions that somehow we're able to also attend those meetings by Zoom.

That's not a topic for tonight's discussion and it will be a topic soon. I think it's a perfectly legitimate question, but tonight's question is very narrow. Do we approve the purchase agreement? As much as I'd like to discuss that with you, it's just not appropriate at this time. I do want to address one other matter that Once this board of directors is formed, they direct the Community House Foundation. The city's powers are limited to what I just outlined. The city commission does not ratify decisions of this board. The board makes its decisions and does what it does. We can merely change their bylaws or remove directors. Okay, thank you. You're welcome. Anyone else online? In the room? Okay, I think it's time for a motion. Who wants the honor? Commissioner Cole.

I'd like to make a motion to adopt and approve the attached resolution authorizing the purchase of 380 South Bates and to execute the purchase agreement between the City of Birmingham and the Community House and to direct the City Manager to pursue and implement the necessary steps to keep the Community House operating and staffed during the ownership transition, included but not limited to ensuring the continued operation of the child care facility in the building. Commissioner Cole, stand by.

And I would suggest, because I think it's important for public to understand and hear, if you would also read the attached resolution that you're voting on.

The whole thing?

Yes, please. Sure. And I did hear last night. And I was watching. Thank you.

And we called it right. She will make you read it.

Last night we discussed whether we needed to read these long resolutions about special assessments and...

So this is the City of Birmingham resolution authorizing the purchase of real estate property. At a special meeting of the City Commission of the City of Birmingham, Oakland County, Michigan, held on the 19th day of May 2026 at City Hall 151 Martin Street, Birmingham, Michigan, 48009. whereas the birmingham city commission recognizes the historic community significance of the property commonly known as the community house located at 380 south bay street in birmingham michigan the property and whereas the city of birmingham and the community house association are partners to litigation pending in the Oakland County Circuit Court case number 2025-219218-CB involving, among other matters, deed restrictions governing the property, and whereas the Community House Association has filed a Chapter 11 bankruptcy proceeding in the United States Bankruptcy Court for the Eastern District of Michigan case number and the city of birmingham and the community house association have negotiated a proposed transaction for the acquisition of the and whereas the parties have negotiated a purchase agreement setting forth the terms and conditions for acquisition of the property by the City of Birmingham on behalf of a non-profit entity to be formed, of which the City shall be the sole member for purposes of maintaining and administering the community house, consistent with all deed restrictions for the benefit of the Birmingham community and its residents. Excuse me. And whereas the purchase agreement includes provisions relating to the division of endowment funds intended to support the future maintenance and community use of the property. And whereas the purchase agreement further includes mutual releases and dismissal with prejudice of the pendant Oakland County Circuit Court litigation upon closing. and whereas the sale remains subject to approval by the United States Bankruptcy Court, satisfactory title insurance and title review, environmental review, and other due diligence investigations if necessary. Now therefore, be it resolved that the purchase agreement for the property of 380 South Bates Street, Birmingham, Oakland County, Michigan, 48009 shall be executed. be it further resolved that purchase price for the subject property is $5,200,000, together with an earnest money deposit and related closing costs and transaction expenses as provided in the purchase agreement.

Second.

Do you need the rest to be further resolved?

No, it's fine.

Did I hear a second? Yes. Okay, we have a motion and a second. Is there any comment on the motion? No comments whatsoever?

It's been a very long haul. I commend the community who rose up and let us know how important this was. We also feel the same way. We consider this building to be an integral part of our civic campus and the history and the culture of Birmingham and obviously vital to its future. And I think that everyone here has made the best negotiation that we could possibly make to ensure the future of this building and its role in our community.

Further comments? Thanks to everybody. I just wish it was like a really clear cut, this is what we ought to do. I'm supporting it, of course, but not without concern that we are either making compromises. You know me, you know I'm a fighter. That's what it is, and we are going to make the best of it. Commissioner Host.

Yeah, no, this is certainly wonderful for the Birmingham community, but part of what we're listening to is, sadly, Most half of the Birmingham thinks we already owned it and I think it's a PR problem to explain Though you did it very nicely.

Mr. Mayor that we've never owned it until this purchase agreement Okay, any comment from anyone online no one in the room Okay, roll call

Commissioner Host?

Yes.

Commissioner Cold?

Yes.

Mayor Baler?

Yes.

Mayor Pro Tem Long? Yes. Commissioner Kozlowski?

Yes. Well, the motion passes, I might add, unanimously. Another unanimous decision from the sixth member, Birmingham City Commission. Minus the recusal. Right. Five members today.

Do you think it's important to talk about the next step? This is not the end of it. This is not a dumb deal. It has to be approved by bankruptcy court and then we also have... Why don't you...

Someone want to address that? I'm not the best person to do that.

mean we yes so tomorrow motion I believe tomorrow a motion will be filed to approve the sale through the 363 process and so that motion has to be approved by the Bankruptcy Court so this is the signature of a purchase agreement to make the next step but this just to correct Commissioner host briefly it's not we don't own the building as of the signature of this purchase agreement there has to be the closing and we have to pursue that closing but again this has to be approved by the United States Bankruptcy Court before it could be finalized That's the next hurdle. That's the next hurdle. So this is a step in the process, certainly in the right direction, and I applaud all of you.

Assuming all that happens and there is a closing, is that a public thing? Do we have a public, any kind of public recognition ceremony?

In the past there has not it's a it's a closing like you would expect your own personal real estate Transaction to be a closing you meet at at a broker's office or the bank or wherever and all of the paperwork gets signed sealed and delivered We could certainly have a discussion about it at a public meeting is likely to be coincide with a City Commission meeting I can't possibly say all right.

Well if it gets close if it's close It's within a day or two and you can do it on the day of the commission meeting. That would be great You can invite the community any other

And then just in the interim, Barnum Law Firm is busy with the foundation, setting up the foundation, applying for it through the Attorney General, getting approval, setting up bylaws so that that is happening on a concurrent parallel path so that we are able to hit the ground running as soon as possible.

And due diligence. And due diligence. It's already kicked off.

Okay. Any other questions or comments before we adjourn? Yippee.

Motion to adjourn?

Second. Adjourned. All those in favor? Aye.