Church sues to rescind post office sale

FAYETTEVILLE — A church is suing to rescind the sale of property on Dickson Street, saying a mutual mistake was made between buyer and seller about options to buy the land where the U.S. Post Office sits.

Central United Methodist Church sued Barbstan Partners, a brother and sister partnership, Tuesday in Washington County Circuit Court. The church bought the adjacent property from Barbstan in 2014 for $3.3 million. The church owes about $2.75 million on the property, which is now valued at $5 million, according to the lawsuit.

The Post Office has leased the property since 1971, according to the lawsuit. The lease was amended in 1981 and later extended through July 2021. Central was bound by the terms of purchase to honor the lease.

Church officials said they recently learned a provision in the 1971 lease gives the Post Office an option to buy the land in 2021 for $1.2 million, rather than fair market value, which the lawsuit contends is what both sides thought was the case, based on the 1981 lease.

Post Office officials have told the church they intend to exercise their option and buy the property when the lease expires, according to the lawsuit.

“Our contention is that both parties entered into the sale and purchase of the property under a false premise that the only option available to the U.S. Postal Service to acquire the property was by a fair market value price,” Brian Swain, executive director of the church, said in a letter to the congregation.

The lawsuit contends the church offered to give the property back to Barbstan, but Barbstan refused.

The issue apparently came to light in March after a third party approached the church about buying the property. During preliminary discussions, the church received information the option to buy in the 1971 lease might not be superseded by provisions of the 1981 lease and the post office might have an option to buy the property in 2021 for $1.2 million.

“Central United Methodist Church’s position with respect to the property is financially perilous,” according to the lawsuit. “Central United Methodist Church finds itself in the position of having paid $3.3 million for the property, owing approximately $2.75 million to a bank on the note secured by the property and possibly having to sell the property to the U.S.A. in 2021 for $1.2 million.”

Central’s rent from the property is $123,705 per year, according to the lawsuit.

Central is represented by Vince Chadick, Brandon Cate and Philip Elmore with Quatlebaum, Grooms and Tull.