After a long-fought fight to save it, the end now appears inevitable for the Palace/Wayne Hotel building in downtown Crookston.
“We certainly gave it every opportunity for development, and much as I would like to see it developed, I don’t think it’s going to happen,” Polk County Commissioner Bill Montague said at the board's meeting Tuesday. “It's time to move on.”
The county and city received word late last week that the latest attempt by MetroPlains Development, the Twin Cities developer that's been working on a plan to restore and rehab the structure into affordable housing, to secure funding in the form of housing tax credits for the project was denied. An email from John Errigo of MetroPlains to city officials Thursday said the firm’s application for Minnesota Housing Finance Agency funding hadn't garnered enough points to compete in the general pool and that MHFA ran out of money in its rural development set-aside.
“I understand from past conversations that this is the end of the road for our efforts, and that demolition is likely to proceed in the near future,” Errigo wrote. “We plan to meet with (USDA) Rural Development in a few weeks to return the ($1 million) Section 515 loan commitment that Rural Development made to The Palace back in 2007, and to discuss how to improve coordination between MHFA and Rural Development.”
While stopping short of approving demolition of the building, commissioners gave County Coordinator Jack Schmalenberg, Environmental Services Director Jon Steiner and Auditor-treasurer Jerry Amiot the go-ahead to get preliminary estimates for demolition and associated costs. They're scheduled to report back to the board on March 2.
Long road
In 2003, the county acquired the tax-forfeited property and more than 110-year-old building, which quickly became one of its biggest headaches. It had fallen in great disrepair and was unoccupied for some time after housing LeMar Photography for many years. Among other things, the structure had sustained significant mold damage inside due to a leaking roof, which has been covered to prevent further damage. It has grown increasing hazardous for those venturing inside to go up the stairs.
After discussing the matter in detail for several years and getting some demolition estimates, the board realized there was no inexpensive answer to the Palace/Wayne dilemma. The demo estimates were in the neighborhood of $300,000, but trying to rehab the building would cost millions the county simply didn't have. Foreseeing more needs such as this in the future, the board set aside money for a demolition fund.
When the board was all but ready to move ahead with the demo process in 2007, MetroPlains approached commissioners with its plan, which appeared to be a strong possibility at the time. Project organizers were confident that they could secure the tax credits and other funding necessary to save the structure. The county even said it might contribute the funds it would have used for demolition to the project.
Although the property is, by law, the county's responsibility, the City of Crookston got involved in the proposed project as well. A purchase agreement with the Crookston Housing and Economic Development Authority was approved to simplify and expedite the application process.
Commissioners voted to extend the purchase agreement three times pending MetroPlains' funding applications for tax credits. The first, in 2008, was denied. All agreed, though, that the third extension would be the last.
CHEDA Executive Director Dan Johanneck said the purchase option is no longer likely to be explored.
Cost issue
So now it all comes down to cost. The board agreed that new demolition estimates will be significantly higher and could run $500,000 or more.
“That's just for the demo,” said Schmalenberg, pointing out that before the wrecking ball can even begin to swing, there are preliminary items that need to be taken care that could cost as much as $100,000. The county needs to complete an Environmental Assessment Worksheet (EAW), have the Minnesota Historic Preservation Office sign off on the project and deal with hazardous materials in the building. Because of the historical classification, the pre-demo process involves steps that are more costly, he added.
The building is on the Preservation Alliance of Minnesota's 10 Most Endangered Historic Places.
Commissioners Don Dietrich and Warren Affeldt expressed concerns that the city become more involved, monetarily and in other ways, in the Palace/Wayne project.
“I fully believe it is the City of Crookston’s moral responsibility to partake in some of the costs of this demo,” said Affeldt. “The property generated tax revenue for Crookston for many years. The worst part is, it has several other buildings facing this soon; I don’t know of any other city in county with this issue.
“I'm concerned that we're pending these precious dollars to demo buildings in Crookston while we may need those dollars elsewhere,” he went on. “Important human services could suffer because of this. Until they step up, I just can’t support this.”
Dietrich said he feels that taking dollars from townships far from this area to take care of Crookston's buildings is not right, even though the law says it is.
Crookston Councilman Keith Mykleseth, who attended the meeting on behalf of the city, said the mayor and presumably the council shares his opinion that it's time for the building to come down. He and Johanneck told commissioners they would work to explore how the city and county can pool their resources on project.
A joint city-county committee is being formed, with one commissioner from Crookston and another from a different part of the county serving on it. Steiner said the demo would not be able to take place until summer at the earliest, after all the preliminary work it completed.
