The old deJong's building is being eyed as another Main Street condominium development for the Kunkel Group, already transforming the former JC Penny building into condos.
On Tuesday, the city's Redevelopment Commission voted to give approval for the city to negotiate a real estate deal with the Kunkel Group. The city's Department of Metropolitan Development will negotiate with the Kunkel Group for renovation of the old building, its annex and land.
Although the vote was 4-0, commission President Robert Goldman told Metropolitan Development Director Gregg LaMar he and his staff should have given serious consideration, also, to the proposal of Terry Lewis. The longtime owner and operator of the Rug Merchant in Olde Town, sought to acquire just the annex for a high-end rug gallery.
"Their participation could be compelling" for Downtown, said Goldman, himself a Downtown merchant. LaMar suggested Lewis might negotiate with Kunkel, who plans to build first-floor commercial space in the annex adjacent to the old deJongs, located in the 300 block of Main.
Lewis said he offered more per square foot for the annex than Kunkel, and he said his proposal got short shrift from the city.
"I was going to spend a lot of money for something I thought was going to draw people from all over the country, instead of another empty retail space Downtown," Lewis said.
Kunkel Group offered the Redevelopment Commission $137,500 for the old department store, annex and parking lot.
Lewis' offer of $40,000 was for the annex only. Lewis said because of the large investment in appointing the gallery - included in his proposal was $30,000 worth of cherry flooring and brick interior walls - he wouldn't consider leasing from Kunkel.
Commission member Frank McDonald II said he was "pleased" to see Kunkel's interest in transforming the deJong's property into a $4.831 million, 31-unit condo project.
McDonald, a banker and former mayor who two years ago was a persistent voice of caution in discussions of a Downtown loft development program, agreed with LaMar's assessment that Kunkel's second project bears witness to how the city's desire to stimulate Downtown residential development has "evolved."
"I give the mayor credit," McDonald said of fellow Democrat Jonathan Weinzapfel. "To stimulate housing Downtown has been the desire for a long time. We've had a lot of success very quickly with these programs."
Downtown residential development has reached the point, McDonald said, that "less is being asked for (by developers) and less- rightfully - is being given by the city. ... Developers know now they can make money on housing Downtown."
The city's loft subsidy program in 2004 and 2005 offered grants to the tune of $20,000 per unit.
A year ago, the Kunkel Group received $10,000 in grants and $10,000 in no-interest loans per unit in the 23-unit Renaissance on Main Street development in the former JC Penney building. In the latest proposal, Kunkel is seeking $10,000 per unit in two-year, no-interest loans, plus a $150,000 grant for facade improvements.
The commission will be asked Dec.19 to approve a purchase agreement on the property.