Belleville wants to sell vacant city-owned buildings. Here’s the formula for purchases.
The potential sale of a city-owned office building in downtown Belleville would follow a new formula that officials plan to begin using to help spur and guide development.
In a nutshell, the city would sell vacant, unneeded buildings at a discount equal to seven years worth of expected municipal property taxes. In exchange, developers would commit to do quality renovations for the benefit of neighborhoods and the community.
Developers would have to complete renovations within two years, retain ownership for five more years and, in case of default, pay the discounted amount back to the city.
“This is a formula that we’re talking about using on any of our buildings in the future when we do this type of thing,” said Cliff Cross, the city’s director of economic development, planning and zoning. “We don’t want to just give away buildings.”
The city owns hundreds of vacant lots, homes and commercial buildings. Many have been purchased from St. Clair County for back taxes, according to officials.
The new formula was created in recent months by Cross and his staff, in conjunction with Belleville City Council’s Economic Development and Annexation Committee.
Based on the formula, committee members recently approved a conceptual agreement for sale of an office building at 407 E. Lincoln St. in downtown Belleville. It hadn’t been purchased for back taxes. City departments occupied it until recently.
Under the agreement, the building would be sold for $80,413 to Andria Powell, owner of Belle City Fitness Collaboration, a fitness center on Mascoutah Avenue that she would like to expand. That is $38,654 less than the city’s estimated appraisal of $119,067.
“The whole parking lot will not go with that property,” Cross said. “It will remain a public parking lot.”
Essentially, the city is offering Powell a discount equal to seven years of expected municipal property taxes on the improved building. In exchange, she would complete renovations within two years and move in the fitness center.
Powell has presented a proposal listing $112,500 in desired improvements.
“It’s a great building,” she said last week. “... It was just recently occupied. But it definitely needs some work (and) I would like to see it dressed up a bit.”
The agreement must be approved by the full City Council before Cross and his staff can prepare a sales contract with more details, he said. That would include the number of parking spaces sold with the building and an easement allowing Powell’s customers to park in the public lot.
The date of the City Council vote hasn’t been determined.
“Due to a prior commitment, I’ve asked the economic development department to put a hold on sending the agreement to the City Council for a month,” said Powell, who also owns and operates Circa Boutique + Gifts on East Main Street in Belleville.
The one-story, 5,154-square-foot brick office building on Lincoln Street was built in 1956. The city bought the parcel, which included a large parking lot, for $235,000 in 2014, according to St. Clair County assessor’s records.
The building became home to three city departments: Health, Housing and Building; Economic Development, Planning and Zoning; and Engineering. Last spring, they moved to the city-owned Southwestern Illinois Justice and Workforce Development Campus on West Main.
The county now values the Lincoln Street building and parking lot at $280,335, based on its 2014 purchase price and annual increases.
The city discussed hiring its own appraiser this year but decided to save the cost and time by coming up with an estimated appraisal for the building only, based on the county value for that portion of the parcel with the building on it, according to Cross.
The conceptual agreement with Powell also addresses what would happen in case of default:
“In the event that the buyer does not operate the approved concept for a period of 5 years, upon issuance of an occupancy permit, the buyer will be required to pay the City an additional $38,654.00 which represents the remainder of the estimated appraised value price of $119,067.00,” it states.
“Furthermore, if defaulted within years 1-5 upon the issuance of the occupancy permit, an additional penalty of $5,000.00 per prorated years of default will be assessed.”
This story was originally published October 17, 2022 at 7:00 AM.
