Superblock property sold for $225K more to city department minutes after a purchase

Horry County Land Records shows that a Superblock property was purchased by the Myrtle Beach Downtown Redevelopment Corporation four minutes after being sold to an entity known as The Holly Family, LLC.

The property, located at 507 9th Avenue North, was purchased by The Holly Family, LLC for $100,000 on March 24 and bought by the DRC for $325,000 on the same day, records show.

Online records also show The Holly Family, LLC as having the same P.O. Box as the DRC. However, in a settlement statement provided by City Manager John Pedersen, the two entities have different P.O. Boxes.

“I have no explanation for the P.O. Box,” Pedersen said. “We do not have a relationship with The Holly Family, LLC. Right now they are technically our tenant but there is no ongoing relationship with them.”

Pedersen stated that the building was rented through a lease-purchase agreement by Diego Bermejo, who was doing business as The Holly Family, LLC. At the time, Pedersen said that the building was in “deplorable condition.”

After entering the agreement, Bermejo renovated the property and established a business on the ground floor, renting out the upper floor to a paying tenant, Pedersen said.

“When the DRC moved forward to purchase the property through our agent, it was necessary to work with the person that had the option to purchase the property,” Pedersen said. “What ensued was a simultaneous closing.”

The Holly Family, LLC then “exercised its option” to purchase from the original owner and then turned around and sold the property to the DRC.

South Carolina Realtors CEO Nick Kremydas, who spoke without direct knowledge of the transaction, said in an email that simultaneous closings occur, but they’re “not a common practice.”

Because The Holly Family, LLC had a legal interest in the property, the DRC had to satisfy the interest in order to obtain the property, Pedersen said.

The settlement statement shows that the DRC paid close to $84,000 in interest to Schiller Property, which owned the property before it was sold to The Holly Family, LLC.

Pedersen said the reason the price increased $225,000 was due to the renovations that were done to the building.

“The $100,000 option was negotiated on an unimproved building, while the DRC’s purchase price was negotiated on a building that had been improved, had a usable second floor and had two ongoing businesses in it,” Pedersen said. “You would expect to pay more for a property that’s been improved as opposed to one that’s almost falling in on itself.”

The settlement statement shows that almost $316,000 was paid to a construction draw loan, which could have been used for the renovations.

“It appears to be a rational, reasonable explanation for it,” said John Crangle, government relations director for the South Carolina Progressive Network. “The family incurred these expenses and they’re simply being reimbursed for them.”

An acknowledgment of receipt of settlement statement was signed by Victoria E. Giraldo, who is listed as a member of The Holly Family, LLC. The Sun News did reach out to Giraldo and Bermejo, but they were not available for comment.

Currently there is a business located in the building. People Solutions Business Center does bookkeeping, taxes preparing, real estate and property management.

A representative at the business said that they are in the process of moving out of the building.

The other superblock properties bought by the DRC with the intention of building a new children’s museum and library were sold between January and May.

“It’s an absolutely normal real estate transaction,” Pedersen said. “From our perspective this is a straight up real estate thing. It’s just as straight up as it can be.”

This story was originally published October 13, 2017 at 5:45 PM with the headline "Superblock property sold for $225K more to city department minutes after a purchase."