City Council Minutes 2012 07 17 - Laserfiche WebLink

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City Council Meeting Minutes July 17, 2012 Page 4 of 12 2. If the City Council approves purchasing the property this action would require (a) expending a total of $1.65 million in 2012 and 2013 consisting of $950,000 (plus closing costs) in 2012 to acquire the property and additional expenditures likely totaling at least $700,000 in 2012 and 2013 to stabilize the Grain Elevator; (b) assuming the risk of cost overruns associated with the work needed to preserve the Grain Elevator and the risk of grants not materializing as anticipated; and either (c) potentially devoting additional funds to redevelop the property (presumably in partnership with a developer); or (d) selling or donating the property to a party willing to assume the obligations associated with owning and redeveloping the property into a commercial or retail use. The timeline for expenditures would require an interfund loan of up to $750,000 to cover payments anticipated through 2013, with additional interfund loan amounts as needed to fund any cost overruns and redevelopment activities. It should be possible to recoup some of these expenditures by leasing the empty 3,360 SF retail building, leasing the redeveloped Grain Elevator, or by selling the entire property. Staff has determined either option is eligible for Historic Preservation Funds. Staff estimates the HPF balance with the current funds and those garnered during its lifetime will be approximately $3.9 million. If $2.1 million were used for this project, it would leave $1.8 million. Some staffing costs are associated with the HPF and subtracting those, it would leave approximately $1.34 million for other projects. COUNCIL COMMENT Council member Loo thanked staff, the developer and Council for all the work put into this project. She questioned whether it was the role of government to spend money on a project others had examined and deemed not feasible. She stated if it is not stabilized it becomes just a pile of sticks. Cost estimate is just that, an estimate and it is unknown what may be faced when trying to stabilize. The cost to preserve and retum to a functioning building would be approximately $3 million dollars. This Fund is legally designated only for historic preservation and the grain elevator may deplete the resources for other structures. If the City were to purchase as an asset, she currently saw the elevator as a liability not an asset and felt turning it into an asset was a risky proposition. The annual maintenance costs on an older building are costly; the City doesn't have time, expertise or the money for developing an historic building and once in City hands there would be pressure to do something with the investment. She felt there was a huge risk and was the reason only two companies replied to the RFP. If the City were to consider purchasing, she requested a business plan to provide more solid numbers. PUBLIC COMMENT Mayor Muckle called for public comment. Peter Stewart spoke on behalf of the Historic Preservation Commission (HPC). He read a letter from the HPC supporting the restoration and preservation of the grain elevator while maintaining adequate funds for other projects.