City officials might have find a new buyer for 30 acres of real estate near Interstate 75 now that a six-year-old deal with developer Al Neyer Inc. appears to have fallen apart.

Middletown City Council was expected to Tuesday on dissolving a 2006 agreement with Al Neyer Inc. that gave the Cincinnati-based developer the option to purchase 30 acres at the southeast corner of Ohio 122 and Union Road for $85,000 per acre, or roughly $2.55 million. As part of the agreement to purchase the parcel — also known as the Bender Tract — Al Neyer Inc. agreed to provide some master planning services for the city’s East End.

Al Neyer Inc. had until March to finalize the purchase of the land, but company officials said the value of the land is now worth less than when the deal was originally struck, making it difficult for them to secure financing from any banks.

Council supported the agreement with a 6-0 vote. Councilman A.J. Smith was not in attendance Tuesday.

City Law Director Les Landen said earlier Tuesday that the developer also had a dispute over an estimated $675,000 the company felt it was owed for its master planning services.

“There was a disagreement of how they were to receive payment,” he said. “They felt that they were owed $675,000 and we felt they were supposed to get their money back by selling the property.”

The plan the two sides are wiping their hands of first was announced in April 2006 and hopes were pinned on the development of East Pointe Center to help the city get out of financial dire straits. The city was planning to put an income tax levy on the November 2006 ballot because of significant cuts forecasted.

Hopes were high in 2006 with the potential development of the East End, especially since the construction of the Atrium Medical Center was underway and there was solid growth in Warren County. However, after the 2008 near economic collapse that forced the federal government to bail out several banks and automakers, developments stalled for the next couple years.

City officials said the developer needed to back out of the agreement because, according to a city staff report released Friday, the company “is not in a financial position to be able to resolve any liabilities that it has to the city in regards to the purchase of the Bender Tract.”

Dave Neyer, Al Neyer Inc.’s executive vice president, defended the company’s decision to not proceed with the land purchase, saying, “To acquire land … in prices above market and to secure financing for that is a very, very difficult thing to do in this market.”

But the mutual separation agreement boils down to “a couple of issues,” he said.

“Real estate values have gone precipitously down everywhere, particularly for land,” Neyer said. “So the value of the land is lower than what was anticipated to happen … over a period of time.”

In addition, there’s a dispute into the means to handle the value of the services that Neyer performed in 2006.

“Coming to grips with both the timing of the requirement to purchase and the recognition that there’s a dispute around the timing and the way of Neyer receiving payment for its services, we said it’s going to be challenging for both parties and would probably make sense to clarify and revise what was previously agreed to with some admittedly less-than-perfect documentation,” Neyer said.

Neyer characterized the termination of the two agreements as “very amicable, very friendly and mutual,” as well as “in the best interest of both parties to separate as we are doing, assuming this gets council approval.”

Al Neyer Inc. owns a building known as North Pointe, and according to the agreement is offering to sell the property to the city. Landen said the price would be below market value.

“We have a couple more meetings set up to discuss it,” he said. “We may not (purchase it) depending on where the price lands.”

Warren County Economic Development Director Martin Russell said the property is a valuable asset because its near Interstate 75.

“It will come,” he said of the development of the area. “It’s just taken more time than folks have been invested in.”