City reviews factors to gain properties
Before deciding whether or not to purchase property the city of Alpena takes into consideration variables to help determine if acquiring the property fits with its master plan and if it can be afforded.
During Monday’s Alpena Municipal Council meeting City Manager Greg Sundin informed the council that the city has been approached about possibly purchasing two pieces of property on State Avenue, each of which sit along city parks. One of the properties is the Beach Motel and the second is a home just to the left of the tennis courts at Bay View Park. The home is one of three that partially block the view of the bandshell near the shoreline of Thunder Bay. Clerk/Treasurer Karen Hebert said when economic times were less harsh a few years ago the city would purchase property that would fit well with other city owned recreation areas.
“When we had money for development, we would look closely at the ones that would expand our parks and if the location of the building, home or business was by a park those will help us,” Hebert said. “We look at what the asking price is and the price we think we can afford. Right now funds are lower and we have to ask ourselves if we want to spend our money that way?”
Sundin said because of the current condition of the real estate market buying land isn’t as costly as several years ago. He said the recession has changed everything, because it has caused steep loss of revenue and the city doesn’t have as much money in its budget for large property acquisitions.
“Property values are obviously down from what they were five or six years ago and there are lower interest rates, but the city’s financial position isn’t what it was five or six years ago either,” Sundin said. “There is a balance you have to look at. Yes, it is a good time to buy, but can the city afford to do it and that is why you have to look closely at is it in the best interest of the city.”
Sundin said the city previously purchased the Lakeside Hotel near the beach and it ended up costing the city more money than what the sale price was. He said that is why it’s important to do research on the property before a transaction occurs.
“The question isn’t just about the buying of the property, but that we would then have to remove or demolish the building and then face any issues like any underground storage tanks that might be there,” Sundin said. “We ran into that with the previous hotel we purchased and we weren’t expecting it. It adds cost, so you have to look at everything or there can be a lot of added costs.”
Hebert said the city staff will review the proposals for the land on State Avenue and if the council decides it would like to make a purchase, the money can be acquired.
“We’ll take a look at it and we’ll get some values and talk to the owners to see what they want,” Hebert said. “Once we get an idea of what it will cost we can pay for it a few different ways. We could do an installment loan and fortunately we have a lot of our loans paid off and we don’t have a lot of debt right now. We have taken out a lot of little loans, most of them are paid off. So if the council wanted to make an investment we could.”
Sundin said the city could make a property purchase without the approval of city residents via an election, but must put any potential sale on a ballot for the people to decide.