The city of Albert Lea is very close to settling a deal with the law firm representing Farmland in their bankruptcy. The firm has offered a proposal that would begin demolition of the company’s Albert Lea plant in October, give the city a sufficient amount of money to pay for the demolition and leave the city with the title to the land when work is complete.

The proposal came in to city hall late Monday afternoon and the was accepted by the city council Monday night.

Under the deal, the city would get the site, which many see as ripe for commercial or recreational development, so Farmland could avoid paying for environmental cleanup. After the demolition is complete, the city would get the land and Farmland would not be responsible for any of the cleanup costs.

City Manager Paul Sparks said the city has been pressuring Farmland to come up with some sort of proposal that would begin demolition before the Dec. 1 deadline that had been set by a court. The city wanted to move up the timeline because of concerns about the integrity of the building and the drainage of polluted waters on the site into the city’s storm sewers. Farmland has come up with a proposal and even a company to do the demolition.

&uot;They have a firm bid from a contractor, that bid is for $2,498,475.56,&uot; Sparks said. &uot;They’re proposing that we now move ahead with the demolition.&uot;

Veit Construction Co. of Rogers, Minn. came in with the low bid.

The funding for demolition will be handled by the city, using money from Farmland’s insurance claims. By state law, 25 percent of Farmland’s insurance is to go into an fund which the city can use for the demolition of the building.

As of now the city has $2.4 million in Farmland insurance proceeds. An earlier proposal had set that as the highest cost the city would pay for the demolition, and any further costs would be footed by Farmland.

The latest proposal will provide $3 million in insurance money. The city will pay for the demolition, and any extra costs, from that $3 million. Sparks said he has spoken to the contractor and the city is confident that costs will not run over that amount.

&uot;We feel comfortable that the $3 million will be more than adequate,&uot; Sparks said.

Any insurance money left over after the demolition would be returned to Farmland and its creditors.

The proposal must be approved by Farmland’s creditors and get through bankruptcy court in order to be valid. However, Sparks said the law firm has set things up so that it can pass, if it does, through these groups very quickly.

After demolition, the proposal states, the title for the land would be given to the city at no extra cost.

When the city takes over the property, Sparks said, subterrainian environmental cleanup will begin. The cleanup will be paid for with funding from federal and state grants, which he said the city was encouraged to apply for by the state, as well as money received from lawsuits by the city against insurers of that property before 1982, which under their coverage are responsible for environmental damage.

&uot;These grants as well as insurance claims will be more than enough to cover the environmental clean-up,&uot;

he said.