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The Albert Lea City Council on Monday voted 5-0 to approve a purchase agreement and development contract with a group of local investors known as Century Partners LLC for the city-owned portions of the Freeborn National Bank and Jacobson buildings.

Under the agreement, the investors will purchase the city-owned portion of the properties, at 201 and 211 S. Broadway, for $1. The agreement also includes a $158,000 promissory note, which is based off the current tax-assessed value for the city portion of the property, City Manager Ian Rigg said. The agreement calls for substantial completion by Dec. 31, 2026, and if the project is completed, the note will be forgiven.

The developers will also be assisted through tax increment financing up to $111,500, which the council approved in June.

Rigg said the agreement is contingent on Century Partners submitting all of the proper plans and specifications to the city. The sale will also not be final until the repairs on the Jacobson front facade are complete.

Because of the investment that the city has made into the facades of both buildings, the agreement requires the investors to enter into a permanent easement with the city. Under the easement, the owners will be required to make any repairs necessary on the facade in the future, and if they don’t the city can move forward with the repairs and assess their cost back to the property.

What are the plans for the buildings?

Century Partners is made up of a group of five local couples who plan to turn the lower level of the bank building into an event center with health and beauty suites on the second and likely third floors. The lower level of the Jacobson Building is planned to have a coffee shop in the front and pizzeria and bar in the back. The front three suites in the Jacobson building overlooking Broadway are planned to be offices, and there are also plans for a rooftop patio.

The developers purchased the basement, main level, mezzanine and second floor of the bank building from Sobro Properties LLC Sept. 28, which had owned that portion of the building since 2018. With that purchase, for $1.2 million, the city was reimbursed for $740,000 in economic development loans it had given the former owners, and a loan was also repaid to the Albert Lea Economic Development Agency for $130,000.

Rigg emphasized that negotiations with Century Partners were completed by staff and neither the mayor nor elected officials took part.

Albert Lea Mayor Rich Murray and 2nd Ward Councilor Larry Baker abstained from the vote.

Murray’s son Jon Murray and daughter-in-law Abby Murray are two of the investors. The other investors are Mark and Emma Habben, Ron and Brittany Eriksmoen, Luke and Kelsey Routh, and Robert and Angie Hoffman.

Baker said he supported the project but said he was abstaining from the vote because he is working with the group for the plans through his employment at Arrow Building Center with the possibility they may purchase some of their materials from the company.

A long history with the buildings

Rigg said the city has owned the bank and Jacobson buildings for nearly 25 years and its initial investment was made to not lose a significant historic structure that without state grants and local investment would have been demolished.

The city in 2006 spent about $2 million to restore the exterior of the bank building, including tuckpointing, a new roof, a skylight and new water, sewer and electrical service to the buildings, among other improvements.

It is currently paying about $300,000 for Advanced Masonry Restoration of St. Paul to repair damaged terra cotta blocks on the Jacobson building. The city had initially applied for and was awarded a $276,000 grant for the repairs but did not move forward with the grant because it would have required the city to continue owning the property. Rigg said repairs are nearing completion.

Rigg noted the property was thoroughly vetted by a third party. Under review, there were not enough incentives to make this project viable for a typical investor, and it became clear that it was a love of community that was the driving part of the investment for the local group that would consider a longer-term look instead of simply looking at adding an immediate revenue stream.

The city had at different times previously sought private investors from outside the area but each time would run into problems.

“An investor from outside of the area would come and look at it and would have a lot of interest because it is a unique building … but by the time they penciled it out they just felt that it was not — there just wasn’t quite enough there,” Rigg said. “What it really took was it took the right investors with a broader vision of what they wanted to do which was more than just make a buck but to do something for the community in order to carry this thing over the finish line.”

When the building is under the new owners, the city will no longer have to pay for maintenance, utility and insurance costs.

“Really I think our biggest gain is just not having what we’ve put into it in the last 25 years go completely in vain and providing some jobs and continued development,” he said.

‘We’re excited for our turn now’

First Ward Councilor Rachel Christensen said there is a lot of interest in historic buildings in the community.

“I’m thrilled that we have local investors and developers who are willing to take on this project,” she said. “I think it will be a gem.”

Robert Hoffman, one of the investors with Century Partners, said in an email statement after the meeting that he is honored to be a part of the project.

“I think we have a community full of many bright people that ‘can’ and ‘will,’ Now, watch them!” Hoffman said. “This group of developers, all local business people, are a few of the many like us that are going to help build more beautiful businesses in our downtown for the region to enjoy.”

“We’ve watched outstanding renovations of buildings take place downtown,” he said. “We are excited for our turn now and we look forward to watching even more developers add to our downtown and community as they, too, choose to invest in Albert Lea.”

Under the agreement, the closing on the property will occur no later than Dec. 31.