Sale of 1st, 2nd floors of bank building approved
Published 8:13 pm Wednesday, June 6, 2018
Council, ALEDA board approve loans to Mortarr
The city of Albert Lea recently loaned a local software startup company $740,000 and agreed to sell a portion of the Freeborn National Bank building as the firm looks to add three dozen jobs to the community in the next year.
The Albert Lea City Council approved the loans and the sale of a portion of the building to Mortarr LLC at its May 29 meeting. Of the loan, $370,000 is from the city’s revolving loan fund, while the other $370,000 is from the city’s recently-started economic development fund.
If 10 jobs are created in five years, $100,000 of the funds loaned from the economic development fund will be forgiven.
Mortarr will be expected to pay the loans back at 2 percent interest over 10 years.
The city agreed to sell the main and second levels of the bank building to Mortarr for $100,000. Under the agreement, Mortarr paid an initial $10,000 fee.
The closing date is slated for next week.
The city will still own the third and fourth floors of the bank building, along with the Jacobsen Apartments and parking lot. Mortarr could acquire more property in the future as it looks to further expand.
“We had to do a sales transaction to allow Mortarr to get a grant from the state because they have to own the space they are building out,” Adams said.
“The reason why we are loaning this money is because if a private bank were to come in and do it, they’d want to take first position on the building. Well, we’re not selling the entire building. We want to retain our right to get the building back if something were to go wrong.”
The bank building and Jacobson Apartments recently qualified for state job creation and job training dollars, but those are rebate programs and do not address capital funding or help with construction costs, Adams said.
The Albert Lea Economic Development Agency board approved a $150,000 loan to Mortarr Wednesday for equipment and furnishings.
Mortarr — currently at 137 S. Broadway Ave. — plans to expand into the bank building by the end of the year.
Mortarr Communications Director Jennifer Levisen thanked the City Council Wednesday for helping advance the project.
“We’re incredibly thankful to the City Council for their support of the project,” she said. “They’ve been fantastic to work with.”
Levisen said the company plans to work with local vendors and Mortarr subscribers on the expansion project.
She expects the company to have 20 full-time employees and two interns by Monday. Six employees have relocated to Albert Lea — some from across the country — to work for the company, she said.
“We think it’s fantastic to provide jobs of this caliber,” she said.
“We’re thrilled to be in Albert Lea. We love Albert Lea.”
Legal details of the sale still have to be finalized.
Mortarr co-founder and Chief Operating Officer Steve Pulley said Wednesday in a written statement that the business is “thankful to the City Council for their approval and support of our purchase of the Freeborn National Bank building.”
“While we’re working through the final details of the sale, we are looking forward to starting the project as soon as possible,” he said.
Built in 1922, Freeborn National Bank was originally constructed as a bank on the first floor and medical and professional offices in the upper floors. The Jacobson’s first two floors were constructed in 1888, and the two upper floors were added in 1923. The buildings share a staircase and elevator.
The city purchased the building in 1998 and in 2006 spent about $2 million to restore the exterior of the bank building, including tuckpointing, a new roof, a skylight and new water, sewer and electrical service to the buildings, among other improvements.
The city previously worked with a Kansas-based developer to turn the building into housing, but the project was unable to obtain tax credits to make the project feasible.