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posted: 4/2/2013 12:01 AM

Des Plaines considers selling, leasing city-owned downtown property

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Des Plaines aldermen Monday night agreed to seek an appraisal on a vacant, city-owned building in downtown to possibly sell or lease the property and place it back on the property tax rolls.

The city has owned the one-story, 3,108-square-foot building, which includes two storefronts at 1486 Miner St., since 2008. The storefronts, each 1,504-square-foot, have been vacant for some time and need minor renovations.

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The city's legal and licensing committee has recommended the city put out a request for proposals to see if developers are interested in purchasing and rehabbing the property, said committee chairman and 2nd Ward Alderman John Robinson.

"We'd like to know what it's worth," Robinson said, adding that the city shouldn't buy property like this in the future to just let it sit without generating revenue.

Robinson said the city should send letters to Des Plaines Chamber of Commerce & Industry members and existing Miner Street merchants to inquire whether any of them are interested in the property.

City Manager Mike Bartholomew said after getting an appraisal, city staff members would draft a request for proposals and evaluate bids after the city council has a chance to review them. The council would decide then whether to dispose of the building and list the property with a real estate broker, or to seek tenants to fill the storefronts, he added.

"With an RFP, we can dictate what occupancy goes in there," Bartholomew said, adding that city staffers would want the property to generate more than just property tax revenue for the city but also retail, sales and food and beverage taxes, where possible. The city also would specify in any future development agreement where sale of city property is involved a timeline for completion of the proposed project, he added.

"We want to make sure they actually follow through with a development," Bartholomew said. "If they don't follow through, the property will revert back to us."

Some aldermen were reluctant to authorize putting out a request for proposals before getting answers to questions such as what it would cost the city to refurbish the storefronts to make it appealing to new tenants.

"Can we look back and see why we bought this building in the first place and how much we paid for it?" 6th Ward Alderman Mark Walsten said. Walsten said it is the worst time to sell city property with the real estate market still struggling and property values so low.

Bartholomew said that is why the city needs to do a cost-benefit analysis on the property.

"Right now, we get zero dollars for property tax," Bartholomew said. "We'll be losing those property taxes until it is the best time (to sell)."

Ward 5 Alderman Jim Brookman said city staff members should consider the long-term plans for Miner Street and whether the city may want to redevelop the buildings downtown like some other neighboring communities have.

"We might not want to sell it and rebuy it down the road," he said. "You might at some point want to redevelop Miner Street."

Brookman also questioned what legal constraints the city could place on the property, if it decides to sell it. "The build out should be the responsibility of the buyer, not the city," he added.

"We can attach whatever conditions we want to the future use," said Peter Friedman, the city's general counsel, adding, the more restrictions placed on the property, the more it would impact the value.

Acting Mayor Dick Sayad said in some cases the city should look at cutting its losses.

"If you find someone to buy it, we will release our obligation for the property tax," he said. "Let's check (with) the people who are right next door and around there to see if they might be interested."

In other business, the city council postponed giving final approval to a proposed 6.9 percent increase to the city's overall water and sewer rate to pass on a 15 percent increase in the cost of purchasing water from Chicago in 2013. The increase was approved on first reading by a narrow 4-3 vote at the March 18 council meeting.

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