ARGYLE — Town leaders have searched off and on for a new town hall location for several years, recently settling on an old town church property for its new center of operations.

DRC/Barron Ludlum

Late last month, the Argyle Town Council voted to buy part of the property owned by Argyle United Methodist Church for $930,000.

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Several developers building along U.S. Highway 377 have offered town hall sites up and down Argyle’s nascent commercial corridor. One widely publicized, council-approved plan from 2006 included a site for the new town hall next to an elliptical park.

Late last month, the Town Council voted to buy part of property owned by Argyle United Methodist Church for $930,000. The decision came after a late-day work session on Aug. 26 and several months of closed-door meetings, according to city records.

A lone resident sat in the chambers waiting for the regular meeting to begin, surprised by the 2-1 vote. Two council members were absent. Resident Trey Thurston said he couldn’t understand how the change in plans came about, especially when he and other residents expected a round park for a town square.

“It was like a Cowboys running back, in the clear and heading for a touchdown, and suddenly he steps out of bounds at the 2-yard line,” Thurston said.

And, he said he couldn’t understand how two council members could commit more than $1 million to purchase and renovate property that belonged, in part, to the mayor.

It was like opening the newspaper on Monday morning “to find out that the running back was betting on the game,” Thurston said, “and he was betting against his own team.”

Contract specifics

Even though they still occupy the buildings, Argyle United Methodist Church sold its old town property to LPS Partners two years ago, according to county records.

Formed in early 2005, a filing with the Texas Secretary of State names LPS Ventures as the controlling partner of LPS Partners. In addition to listing Argyle’s mayor, Greg Landrum, as the managing partner of LPS, Andy G. Pierce and Mark Sutton, both residents of the Tour 18 subdivision in Flower Mound, are listed as officers.

Both Pierce and Sutton wanted to get out of the stock market and invest in real estate, Landrum said.

Landrum first offered to buy the church for $450,000 in 2004, according to former council member Jayne Marshall, who was a church trustee at the time.

Landrum said the early talks weren’t serious, and negotiations with church trustee Daniel Onstot began in earnest in mid-2006.

In August 2006, LPS Partners agreed to pay the church $900,000 in a contract for deed filed with the Denton County Clerk.

“It’s a contract to buy the property at a set date at a set price without taking possession,” Landrum said.

The church has since built a new sanctuary, which is nearly complete, just north of the town limits.

The contract for deed provided the church a $100,000 payment in August 2006, another in August 2007, and a third in August 2008, along with monthly interest payments. A $600,000 balloon payment comes due at conveyance.

According to a report obtained in an open records request, the city staff brought the town hall options back for council consideration in February 2008. LPS Partners were offering the church, the parsonage and about two acres of the church’s original six-acre parcel, a historic site known as Methodist Hill.

Landrum said he stepped away when the Town Council began talks on purchasing the church property. He was concerned from the beginning about the conflict of interest and how it would be perceived, especially given the controversy on the school superintendent and the spring elections.

He said that he had a $1.13 million appraisal for the property and considered the original offer fair.

“I didn’t want to be seen as negotiating with my own town,” Landrum said. “I think that’s destructive.”

In March, the Town Council ordered its own independent appraisal, which valued the property at $925,000.

In response to a records request, officials provided a copy of the town’s appraisal, but town attorney Matthew Boyle said they would seek an attorney general’s ruling on whether the mayor’s appraisal should be released.

Remaining parcel

When the town finalizes the purchase in about two months, LPS Partners will retain about 11 acres in Argyle’s original old town — a large, undeveloped parcel near where other investors continue to buy, sell and redevelop small single lots.

Landrum said he first approached former town administrator Tobin Maples about a planned development for old town several years ago, after the partners bought 430 N. U.S. 377, another six-acre parcel adjacent to the church property, in 2005. He said they were told it was too small.

DRC/Barron Ludlum

Argyle Town Hall is currently located at 516 N. U.S. Highway 377.

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“We needed at least 10 acres,” Landrum said.

After the partners added the church deed to their holdings, Landrum bulldozed an historic home at 430 N. U.S. 377 and listed the two properties together, about 13 acres in all, with Axis Realty.

Action and reaction

On March 12, Landrum filed a conflict disclosure statement for LPS Partners and recused himself from the council’s closed-door discussions.

Council member Jay Pellicone recused himself Aug. 12. Council member Dona Schroetke also recused herself that day because she works for Axis Realty. The brokerage was not involved in the negotiations between the town and the mayor for the church property, she said, but the remaining 11-acre parcel had been listed with Axis. Schroetke declined to comment on the purchase. Pellicone did not return calls for comment.

On Tuesday, Aug. 26, Council member Joey Hasty voted against the purchase, while Bonny Haynes and Joe Phelps voted in favor. Neither Hasty nor Phelps returned calls for comment, but Haynes said she thought history would show they made the right decision.

“In a few years, people will realize the council made the right choice for the town,” Haynes said, “no matter who owned the property.”

The next day, residents were exchanging information by e-mail. A debate later spilled out on Topix, an Internet discussion board.

By Friday, Aug. 29, the town began releasing several communiques about the purchase, but none detailed the mayor’s financial interest in the property.

Instead, a news release, an e-mail newsletter and town Web site postings underscored the need for more meeting space, the cramped conditions for the police department and the increasing clamor by seniors for a community room.

Lyle Dresher, the town administrator, said he attempted in the news release to explain what the town wanted to do with the property and “focused on the what, when, why and how — and not the rest of it so much.”

Landrum said the purchase was good for Argyle.

“This is the right thing for the right reasons at the right time,” Landrum said.

About two dozen residents showed up at the next council meeting two weeks later. Most came to listen, Thurston said, trying to sort out the stories of what became of the town’s comprehensive plan and how much the church property would cost.

Alternatives

While Landrum stayed out of the closed-door meetings, former council member Marshall said she felt he didn’t step away soon enough to avoid the appearance of a conflict, given his significant real estate interest in old town.

Landrum took office unopposed in May 2007 and has described himself as a cheerleader for Argyle, including championing a vision for old town. Landrum published his own vision for Argyle on the town’s Web site and in free Cross Timbers Gazette, the real estate paper that is displayed on front countertop of Argyle Town Hall.

“The town has a comprehensive plan,” Marshall said. “It’s not the mayor’s vision. It’s the residents’ vision.”

Another former council member, Mark Bogosian, said he voiced his concerns that the asking price for the church property was too high.

“The search was not exhaustive,” Bogosian said of the on-again, off-again discussions on moving town hall that started during his term. They heard preliminary offers from developers of Argyle Town Village, Old Town and Creeks of Argyle as well as briefings on other properties.

In late May, the council-ordered appraisal for the church property arrived. The appraisal, conducted by James Daniels of TranSystems, compared the church property to several other Dallas-Fort Worth area churches. It valued about two acres with the church and parsonage at $925,000.

Despite his desire to avoid negotiations, talks began between the town and the partners, Landrum said.

In August, the two sides agreed to a price of $930,000 for 13,000 square feet of space and about two acres.

Haynes disputed the viability of the other offers made for town hall sites. Some residents were being told another developer was offering space for free, she said.

“People just don’t give things, especially to towns, for nothing in return,” Haynes said, adding that whenever there’s a possibility of strings attached, “that’s a no-brainer for me.”

The competing proposal

In 2006, the Town Council approved a two-part development plan proposed by DEMA Partners with homes and businesses between old town and Hilltop Elementary School. DEMA announced plans for a two-acre, elliptically shaped park, offering space for a new town hall there.

DEMA then asked the Town Council for tax-increment financing, telling them that the commercial development, including the park, could not begin without the assistance.

The council balked and voted against a special tax district. DEMA told town leaders that, without the tax-based financing, the development would proceed more slowly.

They began selling lots and homes in the residential portion about a month ago.

After the May election, which ousted Marshall and Bogosian, DEMA restated their offer to donate land and include a new town hall in the commercial portion of their development. According to a May 29 memo, obtained through an open records request, DEMA estimated they could build a 5,000-square-foot building for $500,000, or $100 per square foot.

A June e-mail exchange between Doug Chandler, of DEMA, and Dresher, also obtained through an open records request, showed that DEMA again asked for tax-increment financing in connection with the town hall deal.

“We are not asking for our proposal to be contingent upon forming a TIRZ [tax increment reinvestment zone] district,” Chandler wrote. “However, we still feel this is a great option.”

Dresher reminded him of the town’s risk in considering that option, given the economy and the market.

“The town is saddled with 100 percent of liability of financing a district if the private market fails or responds differently than projected,” Dresher wrote.

Methodist Hill

Currently, town hall occupies an old coin-operated laundry. Argyle plans to keep the building and remodel it for the police department.

Former mayor Yvonne Jenkins said she understands the plan, which gives seniors, civic groups and others a chance to put the 40-year-old church buildings to immediate use.

Dresher paid her a visit after the controversial 2-1 vote, she said.

A lifelong Argyle resident, Jenkins has chronicled the town’s history and championed its handful of historic structures, including the Meadows Building, which was owned by her family, the historic bank and even the historic house LPS Partners tore down.

“You know I never wanted the Methodists to leave Methodist Hill,” Jenkins said.

PEGGY HEINKEL-WOLFE can be reached at 940-566-6881. Her e-mail address is pheinkel-wolfe@dentonrc.com.

2005

Appraisal district values Argyle United Methodist Church property, including sanctuary, education building, and parsonage on six acres, at $234,323

February-March — Greg Landrum, Andy G. Pierce and Mark Sutton form LPS Partners and LPS Ventures to invest in real estate

November — LPS Partners buys six acres and the historic home at 430 N. U.S. Highway 377, which border the church property

2006

Appraisal district values church property at $235,288

January — DEMA announces plans to create a town center with an elliptical park and room for new town hall; requests tax-increment financing for commercial district

Summer — Town Council begins talks on acquiring a new town hall property; LPS negotiates to buy church property

August — Argyle Methodist Church and LPS Partners record contract for deed for $900,000 plus interest; Town Council denies DEMA’s request for tax-increment financing

2007

Appraisal district values church property at $670,337

Spring — Richard Tucker announces he won’t seek re-election as mayor

March — Landrum files for mayor; Bob Swanbeck withdraws his candidacy

May — Landrum is sworn in as mayor; demolishes the historic home at 430 U.S. 377

2008

Appraisal district values church property at $668,856

February — Argyle begins executive session discussions on church property

March — Landrum files conflict disclosure affidavit for LPS Partners; Town Council continues church property discussions, orders independent appraisal

May — TranSystems/James Daniels & Assoc. values property at $925,000

August — Dona Schroetke and Jay Pellicone file conflict of interest affidavits; Town Council votes to purchase the church, parsonage and about two acres for $930,000, and to remodel the current town hall for the police department

October — Town to issue certificates of obligation to purchase the church property

October or later — A $600,000 balloon payment to Argyle United Methodist Church by LPS is due at conveyance