The Albert Lea City Council went back to the drawing board Monday for developing the Freeborn National Bank and Jacobson Apartment buildings.

The council unanimously approved allowing prospective developers to submit requests for proposals for the project.

Albert Lea City Manager Chad Adams said requests for proposals will be sent in the next few weeks. City officials hope to review the submissions in late February or early March and commit to a developer in March or early April to allow for enough time to apply for housing bonding dollars or tax credits.

Adams called it “very difficult” to redevelop the buildings without low-income tax credits, adding that they account for $3.5 million of a project that is expected to cost in the $5 million to $6 million range.

State and historic tax credits — worth about $1.4 to $1.5 million — can be used if the building is developed within the historical standards of state and federal departments.

Adams said that attempting to get tax credits for the project has been frustrating.

“Particularly considering that we’ve been very close two of the three years,” Adams said. “And had there been a bonding bill we’re really confident — the developer (Cohen-Esrey), and I think myself and some other city leaders that would have known a lot of information — that a lot of those developers would have gone after the housing bond dollars rather than the tax credits, which would have made a lot more funding available for tax credit projects, such as our project, which was next in line.”

Adams said there is a “very small” possibility of a special session, which could open up tax credits for the project.

The city signed a contract with Kansas-based developer Cohen-Esrey in 2016.

Cohen-Esrey called for turning the buildings — on the corner of Broadway and William Street — into 21 apartments on the upper floors, with The Albert Lea Art Center and The Interchange Wine & Coffee Bistro on the ground level. The community would also have been able to rent out space for events.

Second Ward Councilor Larry Baker said the city is staying with Cohen-Esrey to see whether the special session allocates funds before the project then broadening its search if funds are not allocated.

Adams said he thinks there is a 50-50 chance the project will receive tax credits during the next session, adding that he had thought there was a 75-80 percent chance the project would have been awarded tax credits had there been a bonding bill.

Third Ward Councilor George Marin suggested developing the building floor by floor.

“We have ownership of it right now, and it is costing us money,” he said. “And we don’t seem to be making any steps forward.”

Adams said the city has allowed for such proposals, adding that the entire block could be developed if there is sufficient interest from property owners.

Albert Lea Mayor Vern Rasmussen said no plans have been set for the project.

“We’re looking for proposals for developers to hopefully get this building developed,” he said.