While there has been much idle speculation behind the motives the Common Council and the City of Merrill has in purchasing the Lincoln House, the biggest misconception Mayer Bill Bialecki has heard is that the city plans to keep the property once it has been rehabilitated.
“We’re not buying it to be landlords,” Bialecki said. “We’re buying it to sell it, but also to control what happens to it.”
The Merrill Redevelopment Authority (RDA) held a public hearing on the property May 3 and at the Common Council meeting on May 10, a blight resolution was adopted on the property. The city will take possession of Lincoln House from Bank of Wausau on June 30 for $150,000.
Kathy Unertl, Merrill Finance and Technology Director, said the city has already submitted an $86,000 Community Development Block Grant (CDBG) application for half of the purchase price and half of the limited health and safety (mold remediation) work the city will do on the building. The rest of the renovation work will be performed by the developer whose proposal is chosen by the council from those submitting proposals. Unertl said those requests for proposals will be requested shortly.
She said that there are a number of grant and tax credits available to assist the developer who is selected. The cost of fully restoring the building inside and out – including removing the white paint on the exterior, will probably cost somewhere around $3 million.
“Without the tax credits, it’s going to be real hard to renovate that building,” Unertl said.
But the developer chosen for the project will also be buying the property from the city, which will also see the value of the property climb to $1.4-1.5 million. City Attorney Tom Hayden said the increase in the property tax value of the Lincoln House will also enhance the value of surrounding properties.
“This could be the cornerstone of downtown, it really could,” Hayden said.
While the city still has ownership of the property, it will work with the Merrill Historical Society and Redevelopment Resources to start the process of nominating the building for placement on the state and national registers of historic buildings. This would put the building in line for possibly receiving historical tax credits. But it also means the building would no longer be the large white elephant in the middle of downtown, as the brick would have to be restored to its original color.
“Without the city taking control, none of this is possible,” Bialecki said.
He added that the application for the historical register is the only part of the process the city will be involved with. Everything else will be handled by the developer.
“In no way are we doing any renovations,” Bialecki said. “That’s up to the developers.”
He said that while one developer from Milwaukee has been involved with the city on the project, they may not be the one ultimately awarded the job. Bialecki said the council will choose the developer who submits the plan for the property that best fits what the city has envisioned, which would be a mix of commercial and apartments as it is now.
Unertl said there are enough tenants in the building currently to cover utilities and other expenses while it is under city control. She said the goal is to have the city retain ownership of the building for about a year-and-a-half at the maximum. This will allow the city and the developer to know the outcome of all possible grants that have been applied for.
In other city development plans for downtown, the city has already solicited bids for the demolition of the former bakery at 818 E. First St. and Courtview Apartments at 1111 E. Main St. The city has already acquired the title to the bakery lot and will purchase the other property for $25,000 on June 30.
Bialecki said that there are no current plans for the bakery building, but the Courtview property could be used for either assigned parking for the courthouse and/or an access road to the parking area behind the Main Street retail shops.
Bialecki said that the city is fortunate that is has the economic tools available to help eliminate the blighted buildings downtown.
“Anything the city can do to enhance the downtown would be in our favor,” Bialecki said.
The goal is to have the process of tearing the two buildings down finished by the end of July at the latest.