Downtown project nears point of no return

Published 12:00 am Friday, July 19, 2002

City leaders braced themselves to take a big step Thursday, as a crucial decision on the future of downtown approaches.

If they decide to purchase the foundering Lea Center building on William Street and Newton Avenue &045; in addition to the Freeborn Bank building they already own at William and Broadway Avenue &045; they will probably pass the point of no return, committing to a major downtown revitalization project.

The city council met in a workshop to hear from Metro Plains, the St. Paul-based firm that wants to turn Lea Center into a mostly residential complex with help from the city and a multitude of state grants. If the city gives the project the green light, it will be the first big domino to fall in a series of moves intended to make a two-square-block piece of downtown more attractive and productive.

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&uot;It is kind of scary, and the safest route, in one sense, would be to do nothing,&uot; said City Manager Paul Sparks. &uot;But in the long run, that might not be best.&uot;

&uot;Doing nothing is not an option,&uot; responded mayoral candidate Tony Trow, who was present along with other members of Destination: Albert Lea, which is dedicated to promoting historic preservation and downtown development.

The council won’t have much time to ponder; the opportunity arose only in the last six weeks, and if the city doesn’t act by Aug. 1, it’s likely that the ownership of Lea Center will turn much more complicated, and Metro Plains will miss a deadline for grant applications it needs to make the project work financially.

That means the city, if it’s going to act, will have to do it at Monday’s council meeting.

Thursday, they received assurances that the company they would be dealing with, Metro Plains, has a proven track record of success and continued commitment to finish what it starts.

Metro Plains has completed around 120 different development projects in nine Midwestern states, including many projects where historic buildings became successful senior or affordable housing complexes, representatives told the council. The company still owns and operates all its developments, President Gary Stenson said.

Examples of the company’s work:

– The Great Northern Hotel in Devil’s Lake, N.D. was vacant and deteriorating when the city seized it due to overdue taxes in 1980. Metro Plains, in its first project, remodeled it into a 38-unit senior apartment complex with 5,000 feet of commercial space

– In 1995, Metro Plains turned an abandoned school in Cannon Falls, Minn., which included two historic buildings, into senior housing and a new senior center for the city with noon meals and activities for seniors. On the former playground area of the school, the company built 18 three-bedroom affordable townhomes.

– The Buckman Hotel in downtown Little Falls, Minn. was used as a medical center until the clinic moved out. The city ended up acquiring the building, and Metro Plains worked with them to turn it into senior housing, combining the building with an adjacent structure.

– One of the biggest projects was the historic Easton Hotel in Wichita, Kan. The building was run-down and owned by a local slum lord when the city acquired it. In partnership with Metro Plains, the city demolished part of the block to make way for new parking, and the building became a 115-unit market rate and affordable housing complex with 30,000 feet of commercial space.

In all of their redevelopment projects, Metro Plains relies on partnerships with the city and state and federal housing and historic programs to make the developments financially feasible.

The company, at any given time, has around eight projects going &045; around half of which are usually restorations of historic buildings, Stenson said.

The Albert Lea project is similar to many the company has undertaken, he said. Like most of them, Lea Center has been long empty and is mired in debt. The building, built in 1926, is considered to be marginally historic &045; at the least, it’s an integral part of a downtown that’s considered one of the most historically intact in southern Minnesota. And there are impediments to success, most notably a shortage of parking.

If the city purchases Lea Center, it plans to solve the parking problem by tearing down the One-Hour Martinizing building to the north, which the city would own as part of the Lea Center package. The entire area from the back of Lea Center to Clark Street would become a redone parking lot, much of it designated for residents of the new development.

Lea Center would probably become a mostly affordable housing development; the kind of housing used is largely dependent on what kind of state grants Metro Plains gets, Stenson said.

The project would become more involved if the city gets a $1.2 million grant from the state, which it hopes to use for aesthetic improvements, curb and sidewalk replacement and utility changes to make the two-block area more pedestrian friendly and attractive to potential developers.

One question is whether Metro Plains would have a good chance at the state grants it needs to make the project work.

&uot;To be honest, there are some concerns about the Albert Lea market,&uot; said Larissa Tadavarthy, a Metro Plains development coordinator who is handling the Albert Lea project. &uot;It’s mostly because of the whole mystery with Farmland.&uot;

The Minnesota Housing Finance Agency, which controls access to many of the grants Metro Plains wants, is concerned that there isn’t enough demand for the housing, she said.

&uot;We’re trying to steer Minnesota Housing Finance’s attention to the good things that are happening in Albert Lea, and the fact that Farmland probably will rebuild here,&uot; Tadavarthy said.

While there may be doubts now, she said her company has never been denied the grants it has applied for to make a project happen.

One of the biggest concerns from the city’s standpoint is the cost. The city would pay $350,000 for the building before basically giving it to Metro Plains, and some have questioned whether that’s the best price, considering the current owner bought it for $220,000 three years ago.

Sparks said the cost is higher now because the building is indebted to banks and an architectural firm paid to do a study there, as well as to local governments for tax bills. And if the building ends up in the hands of debtors, it would probably take years for the city to acquire it while disputes over ownership and the leases of current tenants are settled &045; all while the building sits vacant and deteriorates, Sparks said. He said the price is not likely to be much lower than $350,000 if the city waits, but crucial time would be lost.

The project would be coupled with an effort to find a developer for the Freeborn Bank building, across William Street from Lea Center. That development also hinges largely on finding more parking.

&uot;Over the long run we’ll be able to have some influence (on downtown),&uot; Sparks said. &uot;I am worried about it if we wait too long.&uot;

Some citizens at the meeting urged the city to move ahead.

&uot;You have to be progressive or nothing will happen,&uot; said Chamber of Commerce President Allen Pelvit. &uot;If urge you to continue, and I don’t know how it ends or how you put it together, but it’s exciting.&uot;

&uot;Just get it done,&uot; said Alice Hanson, a resident of Park Avenue.