The Galles Filter Building, formerly known as the Maple Leaf Club, occupies a portion of lot 7, block 189 of the Original Townsite of Billings and it is addressed as 10 S. 26th Street.  The City acquired the property in 1999, intending to consolidate the property with land already owned by the City in the same block and to use all of the property for a large redevelopment project.  The skatepark development on the south half of the block makes it impractical for the City to aggregate the remaining property and use it for a large, private project.  Staff advertised the property for sale in July, 2012 and Council considered the bids on August 13.  Council decided to reject  both bids and directed staff to readvertise the sale.  Staff eliminated most of the conditions of sale that the July advertisement contained and re-advertised it in September.  Bids could be for lot 7, which contains the building, but bidders could propose to also purchase lot 8 so that the extra property could be used for parking, storage or other uses that would support the building's redevelopment.

On October 12, staff opened three bids for the property.  The three bids are as follows:

Jeremiah Young - Kibler & Kirch Design	$65,000 for Lot 7
Maisie Sulser	$60,000 for Lot 7
Interfaith Hospitality Network	$68,750 for Lot 7 & $16,250 for Lot 8

The City Council may sell the property to any of the bidders or may reject all bids.  The Council could impose conditions on the sale, although none were advertised with the request for bids.   

Lots 7 and 8 were purchased with Tax Increment District funds and sale proceeds would normally return to that Fund.  However, the district was terminated in 2008.  A new tax increment district was created that includes this property.  Staff recommends that the funds be deposited in that Fund and be used for eligible tax increment projects.  The Council may also consider using a portion of the proceeds to re-pay Community Development for lot 17, the lot next to the former Arcade Bar.  That lot was purchased with CDBG funds and sale proceeds must be returned to that Fund.  Using some of  the proceeds from this land sale to "purchase" lot 17 gives the City Council more future flexibility to use and/or sell lot 17 in the way that it chooses.  The purchase price would be approximately $17,000.  Council may also choose to use a portion of the purchase price for another purpose.  There is a large surface parking lot west of the building and it uses a portion of lot 7 and all of lot 8.  The Council may choose to use about $4,000 of the sale proceeds to remove lot 7, and lot 8 if it sells, from the parking lot and to repair the east boundary of the lot so that it functions without interfering with the new owners.

Staff recommends that the City Council sell property to Interfaith Hospitality Network, described as lot 7 and lot 8, block 189 OTB for a total of $85,000.  Staff also recommends that approximately $21,000 of the proceeds be used to purchase lot 17 from Community Development and to repair the parking lot.  The remainder of the funds would be deposited in the N. 27th Street Tax Increment District account so that they can be used for eligible projects.