IRON MOUNTAIN - It's been long in coming, but the Iron Mountain City Council now has the ability to issue a request for proposals (RFPs) for a piece of city-owned property on the city's Northside.
In 2007, the Tax Increment Finance Authority (TIFA) purchased the former Khoury Inc. property on North U.S. 2 for $875,000. The furniture maker has since gone out of business after moving to a new location in Kingsford.
The 11.1 acres has sat idle since that time not drawing any taxes for the city, City Manager Jordan Stanchina told the council at Monday's meeting.
"But with the retirement of TIFA in July, the property comes into the possession of the city. It's been sitting there with nothing happening all that time. Now we can go out to the market and see what we can potentially develop for the property," Stanchina said.
He noted that although TIFA purchased the property for $875,000, the value of the property today is $550,000.
"There may have been overpayment when it was purchased, I'm not sure. But with the city adopting its new real estate purchase policy, we can move forward and go out for RFPs now," Stanchina said.
In May 2008, former Iron Mountain resident Steve Mariucci addressed the council about plans he was investigating for using the property as the site for an events center and restaurant as the first phase of the project.
The initial agreement between TIFA and Mariucci Ventures LLC was made on Dec. 31, 2007, with the first phase to create 66 new jobs or 150 full and part-time employees. The project did not go forward.
At Monday's meeting, council members asked about the billboard that is directly in the middle of that property. Stanchina said that the lease is up in April and doesn't automatically renew. The council also has the ability to issue a nonrenewal 90 days before the lease is up.
"What did you have in mind for this property," asked Councilman Colin Jacobetti.
"What we are looking for is a return on the investment. If we decide to go with a reduced price, we want to know what payback will there be, what is the project going to be, and make sure whoever wants to buy it is held to what they say they are going to do," Stanchina said.
Within the Real Estate Sales Policy for the city, there is a step that allows for the sale of less than fair market value of a parcel of property. The policy states, "the city may only consider disposing of real estate for less than the fair market value if the transaction involves a specific economic development project within the city that will have a significant financial benefit to the city by way of an increase in tax base, job growth, any such proposal."
The policy further states
that any proposal must be stated in writing on the form provided by the city and the request will be evaluated and scored by the city to determine if the proposed transaction qualifies for consideration.
Once TIFA was officially closed out, the property reverted to the city and Stanchina said they wanted to get started right away on it.
"It's about time. We've been holding on to this white elephant for enough time," Jacobetti said.
In proceeding with the recently amended Real Estate sales policy, the council authorized the city manager to prepare a report identifying the specific property involved, the estimated value of the property, the purpose of selling the property and any other information or issues the council may direct. The first step is issuing a RFP for the sale of the former Khoury property.
"Turning a non-performing asset into a performing asset will greatly benefit the city," Stanchina added.
Linda Lobeck's e-mail address is email@example.com.