Gentry council sells interest in church property

Wednesday, June 26, 2013

GENTRY - Council members met in special session on June 18 and passed a resolution authorizing the sale of the city’s interest in property located in Lots 25 through 30 of Block 7 in the Piersons Addition to the city of Gentry.

The special meeting was called to deal with a somewhat unusual situation discovered when the Arkansas District Pentecostal Church of God attempted to sell church property deeded in 1978 to the Faith Chapel in Gentry by Troy and Virginia McClelland and A.M. Comer - something not discovered when the property was purchased by the Pentecostal Church of God in 1986.

Included in the warranty deed filed in March of 1978 was a clause which stated that in the event the lands and improvements on it are no longer used by Faith Chapel,title to the property would revert in equal shares to the city of Gentry and to the Salvation Army. As a result of the clause, the current sale of the property was in jeopardy without the Salvation Army and the city of Gentry releasing all interest in the property.

According to Jay Williams, attorney for the city, the Salvation Army had already released its interest in the property.

Williams told the council that state law did not allow the city to give away its interest in the property and, should it do so, the action could be legally challenged - again making it questionable whether a purchaser could obtain a clear title to the property and putting the pending sale in jeopardy.

Proposed by the Arkansas District Pentecostal Church of God as a solution was that the city be paid up to one quarter of the profits realized from the sale of the property to satisfy the city’s interest in the property due to the revisionary clause attached to the deed. The church organization requested in a letter, dated June 18, that Gentry consider less than that amount “in recognition of the long-time ownership of the Arkansas District Pentecostal Church of God and its influence and contribution to the community.”

Williams recommended the council, by resolution, authorize the mayor to execute a quit claim deed to the owner or title company closing the transaction on behalf of the owner in exchange for 25 percent of the net sale proceeds from the sale of the property, with the condition that the city be paid no less than $43,000 on or before the last day of July.

The estimated net proceeds from the sale of the property were $190,000, according to Jim Laudell, agent for the Arkansas District Pentecostal Church of God.

Williams explained to the council that the city had no roll in the creation of the revisionary clause in the old warranty deed and, to the best of his knowledge, was unaware of it when the property was sold in 1986. He said the city could either pass the resolution and settle the claim to a city interest in the property, show up to claim half the property after the sale or face challenges for not having taken action to resolve the claim when the property sold in 1986.

The council, with Janie Parks and Kyle Jordan absent and unable to attend, passed by resolution the recommendation of Williams without a dissenting vote.

News, Pages 1 on 06/26/2013