Wayne White
Managing Editor

The city of Osage City has filed a petition in district court to evict a pharmacist whose business occupies a portion of a city-owned building.

Filed by Osage City Manager Nick Hernandez Oct. 3 in Osage County District Court, the petition against Michael Schroeder and Schroeder Drugs Inc. requests a court order for past due rent in the amount of $70,740, payment of rent accumulating during the court proceeding, taxes and insurance, and eviction of the business from the property.

According to the petition, the pharmacy has occupied a portion of the city-built medical center since April 14, 2006.

The petition states that the drugstore’s occupancy is pursuant to an agreement to lease dated Dec. 21, 2004.

“The Agreement to Lease was entered into as a condition and incentive for the Plaintiff to construct the medical building with occupancy by the Defendant to occur upon completion of construction of the facility,” the petition says.

The petition also states that Schroeder said he desired to purchase the property, “but no agreement has been made or executed for the sale or purchase of the property …”

“Defendant was notified and advised of the monthly rental amount and terms for leasing the premises, but Defendant has failed and refused to pay any amount for leasing of the premises,” the petition says. The petition states an amount of $2,358 as the monthly lease payment, and also requests an insurance premium in the amount of $14,610.

Tuesday, Schroeder did not respond to a phone message requesting comment on the petition.

In August, the Osage City Council directed city attorney Rick Godderz to draft a letter to the pharmacy stating the final purchase price of the pharmacy unit would be $360,247.50.

“If Schroder’s (sic) elect not to purchase or lease the premises within 30 days of the date of the letter they are to vacate the premises,” state the minutes of the meeting.

Contacted last month, Schroeder referred to a letter he sent to the council Aug. 26. In the letter, Schroeder lists communications received from the city regarding the purchase price of the building space ranging from $282,217.79 plus interest in February 2007, to $486,382.47 on March 17, 2008.

A July 28, 2008, communication set the purchase price at $360,247.50, which according to Hernandez included the purchase price, outstanding lease payments, insurance, property tax and interest.

Schroeder rejected the city’s offer in his letter, saying he hoped the purchase price would be “more in line” with the Feb. 9, 2007 stated construction cost, plus an allocation for land cost and interest at the bond rate since the date of occupancy.

Hernandez said Tuesday the city remains willing to consider options other than eviction of the business.

“We’re still open, as long as he comes up with his back rent, brings it up to date, and then pays rent, he’ll be fine,” Hernandez said.

If the court grants the requested judgment and eviction, the city will then begin a search for another occupant of the business space.

“As soon as we hear word from Mr. Schroeder or whatever the courts decide, we will look for another tenant, health-related or not-for-profit,” Hernandez said.

He said bonds secured to finance the construction of the building stipulate that a medical-related or non-profit entity must occupy the space. If another type of business occupied the building, it could affect taxes on the building and conflict with the conditions of the bonds, Hernandez said.

The medical center is owned by the City of Osage City Kansas Public Building Commission and is leased to the city.