City’s plan: Turn old buildings into hot properties

Published 12:00 am Thursday, July 18, 2002

There are plenty of reasons a developer would be interested in the Lea Center or Freeborn Bank buildings in Albert Lea.

Historic value. Good location. And of course, a low, low price &045; probably $1 &045; courtesy of the City of Albert Lea.

Unfortunately for the city, there are also reasons a private investor might say thanks, but no thanks. Leaky roofs. Possible asbestos contamination. Little nearby parking. A city block lacking charm.

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The way Paul Sparks and the Albert Lea city staff see it, rescuing those buildings from the brink is all about removing, one by one, the reasons for a developer to say no.

&uot;If you don’t solve those problems, nobody’s going to buy the buildings,&uot; Sparks said.

For years, Sparks, City Planner Bob Graham and other city employees have been trying to find a scheme with a realistic chance of injecting new life into the two-square-block area that includes the historic, city-owned Freeborn Bank building and the towering, mostly vacant Lea Center, which the city council will consider buying and turning over to a Twin Cities redevelopment company.

Now, Sparks said the city finally has the chance that it’s been waiting for.

Lea Center

The first phase of the plan involves the city buying Lea Center from owner Steve Ogdahl before he loses it to debtors, then selling it to Metro Plains, a company that specializes in turning old buildings into something useful, for $1.

Sparks said the company, acting on advice from state officials who recommended checking out Albert Lea, came asking for ideas right around the time Ogdahl made it clear he wanted to sell Lea Center.

The clock is running on both parts of this phase &045; buying the building and reselling it. By Aug. 1, the building may be in the hands of three different parties who have claims on it: A bank; Freeborn County, which is owed back taxes; and at least one lien holder, Sparks said.

&uot;If we don’t get it solved with (Ogdahl), we’ll

have to deal with three different parties and the dollars are going to go up,&uot; he said.

Metro Plains also must meet an Aug. 1 deadline to apply for state and federal tax credits which would make the project more appealing to them, Sparks said.

The city would pay $350,000 for the building &045; three years after Ogdahl paid $220,000. Because the owner is facing financial trouble, including back taxes and liens on the building, the city will have to pay more to get it from him, Sparks said.

The city feels it’s justified, though, because if it waits until an ownership dispute is settled, the cost will increase and time will have been lost.

&uot;If we don’t do this, we’ll be right back at this point, only time’s gone by,&uot; Sparks said.

If it buys Lea Center, the city will also get the One-Hour Martinizing Building and adjacent parking lot. That whole area would end up as parking lots, and the Martinizing business would be relocated at city expense.

Freeborn Bank

The city bought the Freeborn Bank building two years ago, but partly because it has failed to find a way to increase parking in the area, developers have all passed on the building, Sparks said.

If the city can find a way to acquire the Hanson building and its parking lot just to the east, it can tear down the building and turn the whole area into parking, which would make the building much more attractive to developers, Sparks said.

&uot;Today, parking is absolutely necessary, or you can’t market the property,&uot; he said.

The building, which has been vacant around five years, has deteriorated since then. It’s not heated and the elements have taken their toll inside and out. The roof leaks.

Sparks said the an architectural firm is now assessing the building and will make recommendations about how the city can keep it from deteriorating further before a new owner can be found.

The biggest problem is that the owner of the Hanson building, after appearing to agree to sell the building for $150,000 last month, has withdrawn his offer. It’s the second time in five years the city has tried to buy the building, and the owner has pulled out of the deal both times, Sparks said.

The city would need to relocate the tenants of the Hanson building &045; mostly residential &045; if it tore the building down.

If the city can do that and secure extra parking, Freeborn Bank could have a future as residential space, offices, other commercial space or a combination.

&uot;I think that we have talked to people who may be interested,&uot; Sparks said.

The big picture

If the city manages to get one or both of the buildings redeveloped, the hope is that it will help revitalize a two-block area bound by Clark and Main streets and Newton and Broadway avenues. The road that runs through that two-block space, William Street, could also be looking at changes.

Sparks and other city staff had once entertained the idea of closing William to motorized traffic and make it into a pedestrian mall, but backed off that plan after observing that other cities didn’t always have success with that approach, Sparks said.

Instead, the city may narrow the street. Now, it’s around 60 feet wide, complete with diagonal parking spots lining each side. The city could eliminate that street parking and extend the sidewalks out, creating space for planters, seeded areas, benches and other amenities that make an area attractive, he said.

A narrower street would be more friendly to pedestrians, including the people who would inhabit Lea Center if Metro Plains turns much of it into apartments, as it plans to do. The added parking on the Hanson building lot would more than offset the loss of street parking, Sparks said.

&uot;In effect, what we’ve got to do in order to market these properties, we’ve got to redo the area to make it more attractive for marketing,&uot; he said.

Much of that work hinges on a state grant from the Department of Trade and Economic Development (DTED), for which the city will apply. That money &045; $1.2 million over three years &045; could pay for parking improvements, curbs and sidewalks, burying overhead utility lines and adding decorative features. The grant is not guaranteed, but Sparks said he’s optimistic because DTED encouraged the city to apply.

If all the pieces of the plan fall into place, the two-block area could see a renaissance, and the benefits would spread to the rest of downtown.

&uot;I think it’s worthwhile to try to save the core of the city,&uot; Sparks said. &uot;I think the buildings are architecturally significant and it would be difficult to get them replaced.

For now, the buildings are still salvageable, but that may not be true for long.

&uot;If we don’t get involved soon, time and the elements will take their toll,&uot; Sparks said.

The next step

The city council will hear a presentation from Metro Plains tonight, detailing what the company has done with other properties around the MIdwest. The city council considered approving the purchase of Lea Center last Monday, but Mayor Bob Haukoos asked that the city take more time to study the proposal before acting, and the city council &045; short three of its six members &045; agreed to wait.

The council will consider the purchase again July 22.

Interest earnings on a $10 million city fund, established by a surplus in police and fire pension accounts, would help pay for the transaction. The money can only be used for police and fire purposes, but by putting that money into the budget, the city can offset some expenses and direct the money it saves toward other projects, like this one, Sparks said.

And the long-awaited project might finally materialize.

&uot;We have been working on this for 25 years, we’ve tried idea after idea, floated balloon after balloon, and nothing’s happened,&uot; Sparks said. &uot;Hopefully at this point there’s some momentum.&uot;