The city of Selma and businessman Mark Peterson continue to negotiate a possible sale of the St. James Hotel.

Peterson spoke before the Selma City Council about his plans and terms he has proposed.

If approved, the city would sell the hotel March 1 to Peterson and his company, Ceyero Consulting, for $1.

There had been earlier talks about the city keeping a 10-percent stake in the property.

“The goal was to keep all the parties at the table,” Peterson said.

Peterson has since been advised that it will be easier to get loans for future renovations and expansions if he holds the deed to the hotel.

Another topic for discussion was a clause that said the city could take back ownership if a minimum of $1 million in mutually agreed upon upgrades aren’t made with 36 months. However, the city would owe Peterson for what he had invested to that point.

Peterson said that’s “boilerplate language” that he has used in previous agreements.

“If the city council says we can’t live with it — let’s pull it out,” Peterson said. “My goal, like everyone here, is to help Selma move forward.”

Councilman Cecil Williamson responded that he couldn’t live with those terms. Councilwoman Angela Benjamin agreed that most council members wouldn’t approve repaying Peterson back his investment.

In lieu of an upfront payment, the city would be paid a percentage of future earnings but a minimum of $1.2 million. The payout to the city would be made in years eight, nine and 10 or longer if needed to reach the minimum amount.

As far as what happens next, Peterson said he hopes good faith negotiations will continue. He’s been working for free as the hotel’s manager since Dec. 1 and has made some immediate changes.

Starting Thursday, the hotel will go to a flat rate, cafeteria-styled lunch to cut costs. There will still be a dinner menu.

“I want to thank you for the work you have done and the work you are doing,” Benjamin told Peterson.

The city has put $187,000 into the St. James Hotel since Strand Management left town in March. Williamson said the hotel cost the city $1,000 a day last week.

“We have a real finance problem here. We have spent $187,000 over there we do not have budgeted, that we have not approved,” Williamson said. “We cannot spend a lot of money over there until Feb. 28. We need you [Peterson] or someone to buy this hotel so the city doesn’t have this drain. I know a day of reckoning is coming about this money.”

Peterson responded by saying as part of his due diligence he is looking at ways to increase revenue and cut expenses.

“If I don’t cut into those numbers by March, don’t accept the proposal,” Peterson said.