Hastings developer gets a deal for a dollar

It's sounds like a great deal.

For $1, a Hastings developer gets a cleared site across Fourth Street from City Hall that was recently assessed at $140,000. The city spent more than twice that amount to buy the nearly half-acre site and remove a large, rundown rental home.

This month, the Hastings Economic Development and Redevelopment Authority (HEDRA) reluctantly approved the dollar deal with Stotko Speedling Construction of Hastings. In 2009, co-owner Greg Stotko told the agency that he planned to build a two-story, 6,500-square-foot office building to house two to four firms.

But the real estate market softened, he said, and he downsized plans to a single floor, 3,800-square-foot building.

"A dollar is the only way it would work in today's market," Stotko said Friday. He said he is in final negotiations with Carlson Capital Investments, which would own the property and offices he will build. He said total project costs, including land value and design work, will be nearly $900,000.

Carlson is an investment firm that will bring five or six high-paying jobs and well-heeled clients to town, officials said.

HEDRA's predecessor agency paid more than $300,000 to buy the property in 2003 and raze the vacant home.

HEDRA Chairman Ron Tappin said he and other commissioners were hesitant about the downsized proposal but, given the weak economy, figured it was the best they could do.

"I think we came to the viewpoint that it is everything we wanted in the visual aspects," Tappin said. "It is not as large as we wanted, but they are willing to work around the trees on the site and it will create additional tax base for the city ... We had it eight years. We need to move forward."

Hinzman noted that the site, on a side street, is not attractive to many businesses because it lacks good visibility and traffic. He said HEDRA owns about eight properties it plans to redevelop.

Tappin acknowledged HEDRA's investment is much higher than usual in relation to the proposed office building's cost. The agency's costs average about 7 percent of redevelopment project costs, HEDRA meeting minutes said.

The city will hold a public hearing June 2 on selling the land. Also in June, the planning commission and City Council will review the building plans to ensure they meet city ordinances, said Mayor Paul Hicks.

"In times when you see few shovels in the ground, I think this is a positive thing" Hicks said. He said the site still would likely be a run-down, vacant house without the city's involvement.

"In the end," he added, "it still adds to the tax base."