The on-again, off-again effort to purchase Usem's Inc. property adjacent to the Courtyard Apartments is on-again. Sort of.

The Austin Housing and Redevelopment Authority Board of Commissioners voted Wednesday afternoon to authorize its attorney to prepare a purchase agreement.

There are contingencies attached, not the least of which is the city of Austin's request that the owner of Usem's Inc. reinvest the proceeds of the sale of the property into growing his business elsewhere in Austin.

Another contingency calls for an environmental review of the property, pending public works director Jon Erichson's approval.

Still another contingency removed from the proposed transaction is that the city's purchase of the Usem's, Inc. property be contingent upon Mower County's purchase of other Usem's Inc. property.

That, everyone agreed, is unlikely to happen. The only hold-out to that opinion was Dick Lang, 4th District Mower County Commissioner, and the county's representative on the HRA board.

Despite the motion to authorize a purchase agreement, acquiring the Usem's Inc. property is a far from done deal.

A month ago, the Austin City Council authorized loaning the HRA $225,000 to purchase Usem's Inc. property.

In return for the $225,000, the HRA would obtain a Housing and Urban Development grant for the same amount and repay the city with the grant money.

The owner of Usem's, Inc., Sherman Brothers Investment Company and its local authorized agent, Tom Sherman, would in turn use the proceeds from the sale of the property to, in part, invest in a new auto dealership facility along 18th Avenue NW.

What would happen to the showroom property -- a parcel along Second Avenue Northeast and running north along Second Street Northeast -- remains uncertain.

The city council's decision to loan the HRA the money was not an overwhelming one, as it passed by only a 4-3 margin.

However, there was an apparent misinterpretation of the contingency that Mower County would somehow agree to purchase the showroom property.

At Wednesday afternoon's HRA meeting, the board members sought to clear up any misconception to push the deal forward to a successful conclusion.

First, they had to amend the minutes of their previous meeting.

According to Gloria Nordin, 3rd Ward council member, that misinterpretation first surfaced when former city administrator Patrick McGarvey discussed the possible purchase at a join city-county meeting held before the last HRA board meeting.

According to Nordin, McGarvey's assertion was confirmed by Sherman himself.

When that was reported by local newspapers, Tom Dankert, city finance director, obtained Sherman's assertion that the deal was not contingent upon the county's purchase of his showroom property.

Tracey Chamberlain, Third Ward council member, told HRA board members Wednesday he voted for the council's loan to the HRA based on Sherman's original assertion.

Chamberlain produced a letter from Sherman, which he read to the board members stated the deal was "contingent upon several factors, including compensation" from other transactions.

Sherman joined the HRA meeting in progress and he and the HRA members went back-and-forth on the debate.

Mickey Jorgenson, First Ward council member and chairperson of the HRA board, pointed out the city council had approved the new contingency -- that Sherman reinvest the proceeds of any sale of property into a new dealership in Austin. She said that contingency would satisfactoraliy protect the city's and the HRA's interests.

Sherman stated emphatically, the transaction with the HRA was "not contingent upon the county's action."

When the HRA board members voted 4-1 at Nordin's request to amend the motion to, in her opinion, correctly reflect the original intent of the HRA's contingencies, only Jorgenson voted "Nay."

"Mower County isn't going to do anything," Sherman told the HRA board members. Showing frustration for the more than two years of negotiation and expenses he has incurred in trying to sell his downtown properties, Sherman said, "Mower County has a $500,000 federal grant sitting unused. My interests are to build a new facility. I'm not asking for a handout."

Sherman said he could sell the property next to the Courtyard Apartments to someone else who wanted to operate a body shop and have the rest of the property for his business now separated by a fence from the $7 million complex of upscale apartments.

"You're not the only player in town," he told the officials.

Jorgenson said after the meeting, the resolution authorizing a purchase agreement for the property be drawn up does not mean a deal with Sherman is done.

According to Jorgenson, it allows the proposed acquisition to move forward with necessary safeguards to the city and HRA.

Sherman said, "The new resolution is acceptable."

Lang, who continued to say the county commissioners have not decided against purchasing the Usem's showroom property, said, "I'm comfortable with the resolution."

It was unanimously approved by the five HRA commissioners present at Wednesday's meeting.

Lee Bonorden can be contacted at 434-2232 or by e-mail at

lee.bonorden@austindailyherald.com