The Estherville City Council vote 6-1 Monday evening to approve an Excel Grant to the Estherville Industrial Development Corporation to renovate the former J.C. Penney building at 12 S. Sixth Street.
EIDC purchased the building last fall and plans to repurpose the second floor of the building for use by entrepreneurs and emergency technology-based businesses.
As explained by Estherville Administrator Penny Clayton, the method of financing this grant is to use $100,000 of community betterment local option sales tax unrestricted cash, $50,000 from the fiscal 2015 LOST budget with the remaining $250,000 coming from the city's economic development revolving fund. The amount paid from the city's fund would be repaid by Excel at the rate of $50,000 per year beginning in fiscal year 2016.
Prior to voting, the council heard from residents for and against the project.
Tom Inman, owner of Inman Electric across the street from the building, was in favor of saving the building.
"Invest the money and get a good building and good tenants," he said. "A parking lot will never pay any taxes."
One alternative to saving the building was razing it and turning it into a parking area. It's projected the cost to do that could range from $300,000 to $380,000.
Former city administrator Steve Woodley spoke in opposition.
"Saving a 110-year-old building is an admirable goal," he said. "But I am opposed to using a half million dollars of taxpayers' money to do so."
Woodley said he was behind helping renovate the Gardston Building.
"This renovation project will find surprises," he said. He also worried about the project becoming a 'money pit."
"I can think of a lot of projects that a half million dollars of taxpayers' money would have a greater benefit to the entire community."
Alan Robinson, owner of Estherville Drug, wanted council to put the issue to a vote of the people. He also thought the money could be put to better use.
He pointed other downtown businesses with space on the second floors that is not being used, including his own.
Speaking in favor of the project was local attorney and entrepreneur Chris Fuhrman.
"I would happily be the first person to rent anything upstairs-whether I have a full business or not," said Fuhrman. "My vision up there is kids my age want to work together. They want three or four people bouncing ideas off each other."
Council member Larry Anderson made the motion to approve the plan.
"Part of this project was to save a building," he said. "The second part is for EIDC to find a use. We hope these people can make it work and bring people to the community."
Council member Ann Goebel added that the city has to try something to get entrepreneurs to come to town.
Council member Roger Guge also spoke in favor of the project.
"I feel that's what the LOST monies were meant to be used for is to better the community," Guge said. "That's why I feel strongly about it."
Meanwhile councilman Mike Nieland, who cast the one dissenting vote, agreed with those that said the money could be put to better use on a different project.
"I agree we should do project like this," Nieland said. "I just feel we didn't have the people ready to sign a lease."
He said another concern was staying within that $500,000 budget.
In other business Monday, council set 5 p.m., Monday, Feb. 17 as the date and time for a public hearing on the proposed 2014-15 city budget. It includes a property tax levy of $16.50 per $1,000 of taxable valuation, the same rate that has been in place for several years. That rate is expected to generate $2,361,171. It also includes an expected beginning fund balance on July 1, 2014 of $10,929,661 with revenue of $19,917,124 and expenses of $20,183,859 with an ending balance on June 30, 2015 of $10,662,926.