My city is apparently going to begin discussions with a downtown property owner that owns several key buildings in our small, 10-block downtown. This includes two of the most historic structures. This property owner has been an ongoing problem as far as lack of property maintenance, etc., so this is a great opportunity. We're talking about 4 buildings with about 25,000 square feet, ranging from 1 to 3 stories in height. The buildings over 1 story have 2nd and 3rd floor residential. Also, this deal could include one empty lot. This discussion is likely the result of our recent code enforcement efforts, which has made her more willing to discuss selling the properties. The buildings are not in especially good condition and will need extensive work. We're going to get an appraisal to determine exactly what we're talking about for cost.
I know that this presents an incredible opportunity for a local government to take a more active role in downtown vitality. This property owner has been very resistent to selling in the past. The City doesn't have just a ton of money laying around for this, so a straight acquisition would likely involve bonds.
This is a small town (about 8,000 pop) in a first-ring suburb outside of a major metro. It is experiencing a lot of growth both residentially & commercially. The downtown storefronts are currently about 85% occupied, though some of the busiesses are not ideal (don't keep regular hours, low rent, etc.).
I've got a few ideas, but I'd like to hear from others. So if presented with this deal, what would you do? What kind of deal would you try to structure? How would you approach restoring these buildings? Would you hold onto them as a city and lease them out, partner with a private developer to restore & transfer ownership, use them for start-ups?