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After additional consideration and speaking with the owner, the Albert Lea City Council voted Wednesday to approve the bid for about $232,000 to repair the former VFW building on Clark Street that has fallen into disrepair.

The bid, from American Homes LLC of Albert Lea, will cover the repair of the roof of the building, at 137 E. Clark St., as well as the north wall facing the alley and the east wall facing Newton Avenue. The city previously spent about $103,000 on engineering and emergency shoring to prevent the collapse of the building.

City Manager Ian Rigg said the bids the city received for the project expired after 30 days, not 60 days as originally thought. With the expiration date Nov. 4, he said it would be more advantageous to make the decision before that date then it would be to wait until the council’s next meeting Nov. 13. He said staff is also confident this will be the lowest possible bid for proper repair.

In addition to the bid from American Homes LLC, there was a second bid for $565,000 from Joseph Company Inc. of Austin.

Rigg said along with the $232,000 through American Homes and the previous $103,000 already spent, the city will also include another $58,000 for contingency, asbestos removal and some additional shoring, for a total of about $394,000.

He noted if the city were to demolish the building, that would equate to about $35 per square foot or as much as $500,000.

The repairs will be paid for through the city’s blight fund, with a small transfer of funds from the economic development fund after Mortarr’s loan repayment for $740,000, which would carry the city for a few years while final payments or agreements are met with the owner, Clark Street East LLC.

Second Ward Councilor Larry Baker said from the City Council’s position, councilors have to consider all facets, including things like impact of taxes and safety in this case.

He recalled when the developers first came to the city and met with the planning commission and how excited they were for the project.

“As we all know, life doesn’t always throw us the best balls that we can hit,” Baker said. “Sometimes things go off the rail.”

He said he hoped the city could get the situation figured out with the developer, but if the city ended up with the building back, it would likely cost more money in the long run.

Councilors Brian Anderson and Sherri Rasmussen called themselves “reluctant” supporters. Anderson said there’s a consensus of the community to save the building and noted it would cost more to take it down. He hoped the owners would continue to move forward and turn the building into housing.

MJ Parten, with Clark Street East LLC, said the biggest hurdle for the company is the ripple that has been felt in the economy since the COVID-19 pandemic and the increase in interest rates and construction costs.

“We, too, don’t want anything to happen to that building or with the city of Albert Lea that would be a danger,” Parten said.

He said they are moving forward and trying to get some additional partners on board with the hope of achieving some sort of financing in January.

The historic tax credits that have been approved for the project would be void after December 2024, so if the group can’t achieve its financing, it would have to start over with the process again.

Parten said the group still thinks it’s a great project.

Third Ward Councilor Jason Howland said if the city allowed the bid to expire it would likely be looking at a higher price tag.

“We don’t want to see what happened to the 300 block happen to this block as well,” he said.

The council first considered the issue at its meeting Oct. 23 and voted 4-3 against accepting the bid at that time.

Albert Lea Mayor Rich Murray said he thought there was some good discussion about the issue over the last week and a half since that time and said that councilors have been able to get a better handle on the project since then and also hear from the community and the owners.

“We’re looking at this very closely and we don’t just willy nilly put $200,000 into a building,” Murray said. “I would much rather the parties that are going to do this building would take this project on and spend their 200 and some thousand … Bottom line is we don’t want to see that building deteriorate any further, we don’t want to see that back wall fall and Albert Lea needs housing — and we need it now. And so it’s very important we continue this project and keep it going.”

The council voted 6-0 with 1st Ward Councilor Rachel Christensen absent.