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City to Make $163K Profit in Sale of Former City Manager's House

The city is making a profit on the sale of a property it owned with former City Manager David Carmany after its sale closes escrow later this month.

The sale of the property at 2913 Pacific Ave. should net the city about $163,000, according to Finance Director Bruce Moe.
The sale of the property at 2913 Pacific Ave. should net the city about $163,000, according to Finance Director Bruce Moe.
The Manhattan Beach property owned jointly by the city and former City Manager David Carmany should net the city about $163,000 when escrow closes, said Bruce Moe, the city's finance director, after City Council voted unanimously to agree to its sale Tuesday.

The 5-0 vote to sell the property at 2913 Pacific Ave., already in escrow, for $10,000 less than its list price of $1.495 million follows Carmany's early November dismissal. Carmany bought the property with financial assistance from the city as outlined in an employment agreement. The then City Council entered into the agreement so that Carmany and his wife Laura could afford to live in Manhattan Beach when he was hired in January 2011.

Under the terms of that agreement, once no longer employed by the city, Carmany could buy the city out, and vice versa, or the property could be sold.

Carmany elected to put the property on the market shortly after he was dismissed without cause in early November. City Council opted to not purchase the property earlier this month.

Escrow is expected to close before the end of the year. Once it does, the city will recoup its original $540,000 equity investment, a $432,000 repayment of a loan made to Carmany, and the $163,000 in estimated net equity increase after closing costs. 

The $432,000 was an interest-only loan at 5 percent, said Moe, adding that Carmany made all payments due on the loan.

All of the funds used by Carmany and the city for the property purchase will return to the city's general fund, where they came from, said Moe. The $163,000 gain for the city will go into the general fund, as well. 

Carmany's potential take from the sale has yet to be determined by Patch.

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