Lea Center purchase delayed, but councilors happy with plan

Published 12:00 am Tuesday, July 9, 2002

If the city buys the Lea Center building and turns it over to a redevelopment company, a contract would ensure that the company makes millions of dollars in improvements &045; which the company is already planning, City Manager Paul Sparks said.

&uot;If they contract to do it, they will do it,&uot; Sparks told the city council Monday. &uot;If they sign a contract, they are obligated to proceed.&uot;

The plan is to turn most of the building &045; probably five of its six floors &045; into apartments.

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Despite those assurances, a shorthanded city council Monday decided to wait two weeks to decide whether to buy the long-suffering building and sell it to Metro Plains, a Twin Cities development company, for $1.

Mayor Bob Haukoos asked the council to hold off on its decision, partly because three council members were absent, and partly because he wanted more information on the company’s plans, he said.

&uot;If you really have some concerns, we should go over the whole project again,&uot; Sparks said. &uot;But it would be imperative to try to keep this project moving ahead.&uot;

The city still must deal with some planning surrounding the transaction, including parking arrangements that would probably include the demolition of the One-Hour Martinizing business north of Lea Center

to make way for more spots. The city may also consider closing an alley west of Lea Center to add even more parking.

&uot;The mayor’s correct: There are some issues we’ve got to discuss,&uot; Sparks said.

The city’s overall plan for the two-block area, bound by Broadway and Newton avenues and Main and Clark streets, also includes the purchase of the Hansen building and an adjacent parking lot on William Street.

&uot;That, added to this , would make even more area available for parking,&uot; Sparks said.

The city signed a contract to buy the property for $150,000 two weeks ago, but the property owner has since changed his mind and asked for more money, Sparks said. The city may pursue condemnation to seize the property, if it comes to that.

&uot;Tie that into a reconfigured William Street and you’ll end up with, I think, a very attractive area for developers,&uot; Sparks said.

The city only has until the start of August, however, to make the project work, because the development company needs time to apply for state housing tax credits and other assistance to make the project work. Also, Lea Center may not be available for much longer, Sparks said.

&uot;My biggest concern really deals with the current property owner and how much staying power he has,&uot; Sparks said. &uot;We may not be able to make a deal with his successor very easily.&uot; The building is in financial distress and may wind up owned by a bank before long, he said.

The city would buy the building for $350,000 then turn around and sell it to Metro Plains for $1. The city’s expense would be paid back over time by increased taxes from the reinvigorated Lea Center building.

The money for the purchase would come, indirectly, from interest earnings on a city police and fire pension fund. The city can legally spend that money only for police and fire purposes, but by directing money from the fund to those expenses, the city can free up money in the budget to pay for other projects.

At Haukoos’s request, the city council decided to talk the project over in a workshop before the next city council meeting July 22. But council members appeared ready to move forward with a project many see as vital to downtown.

&uot;I think it’s imperative that we get this done,&uot; said councilor Mary Kron. &uot;These two buildings have been sitting there for so long. The old bank building is a beautiful building but it can’t last too man more winters.&uot; The vacant Freeborn Bank building is not heated and has visibly deteriorated over the years.

&uot;I think it’s very important,&uot; agreed councilor George Marin.

Council members Ron Sorensen, Al Brooks and David McPherson were absent from the meeting.