A new Mexico Beach City Hall is headed back to the drawing board.
During a special meeting on Monday, the City Council unanimously voted to accept an insurance settlement on the historic Parker House.
The final offer on the structure, which was purchased by the city in 2011 and caught fire days later, was $750,000 plus $61,100 in rent reimbursement for the years spent on a temporary building used as a city hall.
When that building was purchased by PeoplesSouth Bank, city employees moved into the Public Works offices.
The acceptance of the settlement, which came nearly three years to the day of the claim, leaves the council with $649,000 to pay for a new city hall.
Original estimates from Cathey Construction for a two-story city hall held a price tag of more than $1 million dollars.
“With $649,000 left, we can’t build what is proposed,” said Councilwoman Mary Blackburn. “I think we have to start with a blank slate.”
Mayor Al Cathey was absent from the voting due to Cathey Construction’s affiliation with the project.
The new city hall was planned to sit in a new location on the Parker House property. The historic Parker House underwent demolition in April.
An official contract between the city and Cathey Construction was never drafted due to the state of flux in the project and all that was filed was a Request for Qualifications on the project.
The council referred to the document as an “agreement to agree.”
Blackburn and Councilman Jeff Tendler agreed that canceling the contract with Cathey Construction was the best course of action.
Councilman Jack Mullen wanted city attorney Paul Komarek to look at the agreement to ensure that if it was canceled, they weren’t legally obligated to offer the project to the second bidder, Southern Cat.
Mullen added that Komarek should be able to share his findings for the council’s regular meeting in August.
Councilwoman Tanya Castro suggested that if the scope of work completely changed, it may relieve the council of any monetary penalties toward either company.
Mullen had concerns about canceling the agreement without legal review since the city still owed Cathey Construction $40,000 for services rendered on the property.
“We need a comprehensive legal review of where we stand before we go out and do something,” said Mullen. “The issue is not what to do with the property; the issue is the next step.”
Blackburn said she wanted to keep the city’s promise to citizens that the city project wouldn’t cost taxpayer money and the group unanimously passed a motion to halt the project, pending legal review of the agreement, in order to develop a structure the city can afford.