By Krystal Spring/Havre Daily Newsemail@example.com
The Finance Committee of the Havre City Council met Monday night to discuss three proposals by private entities to purchase the downtown landmark from the city of Havre, but took, no action.
Before Monday's meeting, there had been some confusion on whether or not the city could receive a grant approval from the Montana Department of Transportation's Community Transportation Enhancement Program, to repair the center's roof - a project estimated at $92,000 - if the building is sold to a private purchaser. CTEP funds transportation-related projects that are designed to "strengthen the cultural, aesthetic, and environmental aspects of Montana's intermodel transportation system." CTEP allows for the implementation of a variety of nontraditional projects like historic preservation.
Craig Erickson, the director of community planning at Bear Paw Development, had initially told the city that if a CTEP grant was approved for the roof, the building would have to remain in the city's hands for three years - a maintenance obligation that has since gone away.
"This really is a new twist. Up until a week ago, I was not aware that CTEP funds could be used for historic preservation in a privately purchased building," he said. "But now the concern is CTEP funds that are allocated to local governments on a yearly basis are small. And when you start talking about historic preservation, that's a drop in the bucket. They're expensive projects to do."
Erickson said Havre gets about "$35,000 to $40,000 per year, max" in CTEP funds. He said the application process to receive a CTEP grant is the same for the city or a private owner.
Up until now, two of the three proposals were contingent upon the city receiving CTEP funds to repair the roof. The city is accepting bids on the roof until Thursday.
Finance Committee members met with Jay Springer on June 28 to discuss his interest in purchasing the Heritage Center. Springer proposed allowing the H. Earl Clack Foundation the opportunity to continue managing the building with his financial help for the next six months. At the end of that "grace period," Springer said, he would enter into a four-year lease with the city, with an option to buy the building for $113,000 at the end of the fourth year. Because Springer had been told CTEP funds are contingent upon the building remaining in city's hand for three years, he felt leasing the building first would help ensure that the city receive the grant funding.
On June 30, the Finance Committee met with Charlie Grant, who said he was representing a private entity interested in purchasing the historic building for $1. Grant later revealed Jim Treperinas as the anonymous buyer.
Grant asked committee members to consider a proposal for a four-year property tax exemption on the building. Grant said Treperinas would spend his money and resources fixing up the historic building, so more businesses would be attracted to setting up office space in the center. Treperinas' proposal is not contingent upon the city receiving CTEP funding.
"The city would be clear and free at the time of the purchase," Treperinas said at Monday's meeting. "I would take care of everything, relieving the city of any liability or responsibility."
Jamie and Tom Lambrecht presented their proposal to purchase the center at a finance committee meeting on July 13. The couple proposed a $100,000 "finance package" - $50,000 of which was available in cash, the remainder in finance. The proposal was contingent on the city receiving a grant from CTEP for roof repairs. Tom Lambrecht said if the grant were approved, an estimated $12,000 of the $50,000 in cash would be used to to reimburse the city for its required 13 percent match in funds for CTEP. The remaining cash would be used to "perform immediate required improvements and to support ongoing operations" at the Heritage Center.
The Lambrechts have since turned in two new proposals for consideration. The first offers $10,000 cash for purchase, with an additional payment of $50,000 upon completion of the planned roof project with CTEP funds. If a CTEP grant is not used to repair the roof, the additional $50,000 payment would not be made. The second alternative offered $30,000 at the time of purchase, to be used as a prepayment of taxes.
The city took over management of the Heritage Center on July 1. The H. Earl Clack Foundation had leased the building since 1996, when the city purchased the former post office and federal courthouse from the U.S. Postal Service with CTEP funds. When a five-year lease expired in 2001, the foundation continued to manage the building under a tenancy-at-will agreement with the city of Havre. The two parties had been attempting to negotiate a new lease when the foundation announced in May that it planned to relinquish management responsibility of the building on July 1 because of financial constraints. The City Council voted June 21 to consider selling the building to a private purchaser.
Finance Committee chair Tom Farnham said the center was appraised for $320,000 in June of 2003. But where the sale of the building will go now is still up for debate. Farnham said all three interested buyers have agreed to keep the museum in the building.
"I would like to see the building sold," he said. "And I would like to see the building back on the tax rolls as well."
According to Farnham, the taxes on the center are estimated at $6,100 per year, if the building were placed back on the tax roll.
Finance committee member Terry Schend said he'd like to see written proposals from all three groups, not just the Lambrechts, before the committee moves forward to choose a purchaser.
"The majority of the constituents that I've talked to would like to see this building on the tax rolls and out of the city's hands," Schend said.
One committee member said she'd like to see more offers from other interested buyers.
"I am uncomfortable with us just working with three proposals," Pam Hillery said at Monday's meeting. "I would like to see this go to an open sale."
Because the historic building was purchased by the city with CTEP funds in 1996, Erickson recommended that the committee sit down with MDT to discuss if the city would have any liability for the CTEP funds used if it sells the building.
The Finance Committee set up a tentative time to meet with officials from MDT at 7 p.m. on Aug. 2 at City Hall.
In other action Monday night:
The City Council voted unanimously to take $10,000 out of the city's water fund to give to the St. Mary's Diversion Project. Mayor Bob Rice said the money will help pay for an initial study on the project. The $10,000 will come out of the budget for fiscal year 2004-2005, which began on July 1.
The Parks and Recreation Committee voted to approve a resolution designating all city parks as tobacco-free. The resolution was submitted to the committee by the Boys & Girls Club of the Hi-Line and the HELP Committee. More than 70 students were attended the meeting to encourage the committee to give the resolution the thumbs-up. The full City Council will discuss and vote on the resolution on Aug. 2.