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Future of Esky DDA building in doubt

ESCANABA — The future of the Center Court, the building used by the Escanaba Downtown Development Authority on the corner of 11th Street and Ludington, was called into question Thursday as Mayor Marc Tall and DDA Director Ed Legault debated whether or not the current lease agreement for the building was really in the best interest of the city.

“The lease is going to expire, so I’d also like to know as we go forward in the budgeting processes that either I have the city’s support or I don’t,” said Legault.

Since 1996, the DDA has paid the city $1 per year for use of the building at Center Court. The authority has also been responsible for much of the building’s maintenance, including keeping the interior and exterior of the building in good repair, door and window repair, routine and major repairs to the buildings plumbing, and maintenance of fixtures and equipment installed for supply of water, heat, electricity, and other utilities.

However, under the lease, the city has been responsible for repair to structural supports, the building’s roof, and the exterior walls of the building. That left the city responsible for an $18,000 roof repair in 2018.

“I am asking that the council not approve this tonight but send it back to the staff to negotiate for a different rental rate,” Tall told the council. “I’m not trying to gouge them in any way, but when we were hit with the costs of the repairs to the building in recent years, I though the dollar a year was not the right rental rate at that point.”

The building, which was once a Standard Oil service station, has a history of requiring expensive repairs. After the building was donated to the city in 1969, it was opened as a downtown rest area and bathroom facility, and later closed due to vandalism. In 1996, the recently reorganized DDA board decided to transform the building into a multi-use facility and home to the DDA at an estimated cost of $80,000. In the end, the project cost nearly $160,000.

“We were having problems with it then; it was brand new,” said Council Member Peggy O’Connell, who served on the 1996 DDA board. “So, to dig down to the problem and look at this as a long-term thing — I don’t have a problem with a dollar lease, but are we going to continue to get nickeled and dimed to death or should we be putting another building there?”

While Legault said a new building at the site may be a long-term solution, Legault was primarily concerned with the repairs that currently need to be made the building and the fact the lease expiring soon. He argued the city would be responsible for certain repairs needed on the building even if the lease was not renewed or a new lease agreement was signed.

“I’m just saying, the repairs that have to be made to the building, that’s part of the lease that was in existence so whatever they are, those are going to be the responsibility of the city at this point whether there’s a new lease or there’s not a new lease,” he said.

Legault admitted he did not know the terms of the lease until he first saw the document while repairs were being done to the roof. However, he pointed to a new heating and cooling system installed in the building this year at a $5,885 cost to the DDA as reason to keep the $1 annual rent included in the lease in place.

“Do we need to pay rent as well when we’re putting in all that money in and a large portion of our budget goes towards that?” said Legault of the DDA’s repeated investments in the building.

A repair company is expected to inspect the DDA today to determine the extent of the repairs needed on the building. Ultimately, the council voted to table the issue until a report could be provided on what repairs are needed and the two newly elected council members, Tyler DuBord and Karen Moore, could take their seats.

“The roof is continually being repaired. It has been repaired a number of times. Now as I understand it there’s leaks in the floor. It’s an old building and more expense is coming, whether it’s the DDA paying it or the city paying it, it’s all taxpayer dollars and I think the rental rate should be hire to cover our exposure,” said Tall.

Another lease between the city and the DDA was approved Thursday without major discussion. For the next 10 years, the DDA will lease eight downtown parking lots for $1 per year. The DDA will also be responsible for paying up to $15,000 per year for snow removal done by the city and for having the lots re-striped annually.

In other business, the city:

– Heard an update on the Rural Energy Savings Program, through which the city is eligible to receive up to $5 million for consumers’ energy saving projects. The city would be able to loan the money to customers — including city departments — at a 3 percent interest rate while borrowing the money through the program at a zero percent rate.

– Held the first readings of two ordinances updating the city zoning to allow storage units in light manufacturing and heavy industrial zones.

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