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City council OKs $70,000 to buy downtown buildings
Sylvania City Council members voted unanimously Tuesday night to spend $70,000 from a rainy day reserve fund to buy the buildings housing the Downtown Development Authority’s office and the adjacent Soda Shop art gallery.
The council plans to lease the buildings to the DDA. The authority’s five-year lease on the buildings is running out and the property owned by O&R Real Estate has been put up for sale.
The money will come from a rainy day fund that has more than $900,000 in it, in certificates of deposit. City attorney Hugh Hunter said investing in downtown buildings means the money will not be as liquid, but still will be an available asset that the city could sell if it ever needs the money.
The council agreed to pay $70,000 to purchase the buildings and spend $20,000 in power company economic development funds to bring them up to code.
City officials originally hoped to use the power company funds for the $70,000 purchase price, but Hunter said the project didn’t meet the criteria for their use.
The city plans to lease the buildings to the DDA at a rate that would be equal to what the DDA would have paid if the power company funds could have been used – the cost to pay back $70,000 at 2.5 percent interest over 15 years.
The DDA had been paying $300 a month in rent and will now have to pay $468 a month in rent to the city.
Hilda Boykin, the DDA's Better Hometown manager, said if the DDA’s share of hotel-motel taxes doesn’t cover the higher monthly rent, the agency will hold fund-raisers to make up the difference.
“We have a permanent place to have our office and art gallery,” she said. The city also is guaranteeing that the buildings will be well-used. “It won’t be deserted again.”
The electrical systems and heating and air also will be brought up to code.
Council members agreed to the deal in a special meeting Tuesday night that lasted about 10 minutes.