City receives one bid, from current lessee, for former Rec Center
The city received one bid for the purchase of the former Community Recreation Center at 801 2nd Ave. N.
Bids were due by 10 a.m. Nov. 19 when they were opened in the Civic Center and the one received was from the childcare facility currently leasing the building for the minimum bid of $800,000.
Laurie O’Leary, the current lessee, attended the bid opening and said that she didn’t have approved financing yet, but was confident she’d be able to get it.
The city opened the bidding process in late October for the building and O’Leary said a month wasn’t enough time to secure approved financing.
City staff were checking with the city attorney to see if the bid could be accepted since the city had required that each bid include “evidence of the bidder’s ability to complete the purchase, such as a bank statement, loan commitment, or other proof of funds.”
City staff said they were in the process of reviewing the bid and anticipated a decision regarding the bid in the next day or two.
O’Leary told The Electric before the bid opening that she’d requested a lease extension and been denied.
City Commissioners approved a lease amendment for O’Leary’s operation in June 2024 giving the entity full access to the property for $7,000 monthly through the remainder of the agreement, which expires Dec. 31.
City accepting bids for sale of former Rec Center
Commissioners have the final say on the sale of the city-owned property.
The building was originally built in 1950 as the DeMolay Youth Center, with additions in 1959 and 1961, for a total land area of 45,000-square-feet with a two-story structure of 16,654-square-feet above grade and a 15,312-square-foot basement, according to the city.
The city purchased the property from Don Pencoske, doing business as Northwestern Systems, a sole proprietorship.
The date on the warranty deed is Feb. 14, 1997, according to the city and there are no requirements in the buy-sell or warranty deed referencing DeMolay.
It’s zoned C-5 central business periphery and is currently leased through Dec. 31.
The property is being sold as-is and contains asbestos and lead-based paint material, so abatement/management would be required during renovation or demolition, according to the city’s invitation to bid, and a 2024 roof estimate provided to the city was $170,000. The appraiser noted the building has about 20 remaining years of economic life.
City moving forward with plan to sell former Rec Center
City Manager Greg Doyon walked commissioners through the sale process during their Sept. 2 work session.
He said the city retained McKay-Rowen Associates for $4,200 to perform the appraisal.
Using that, Doyon said staff intends to set the minimum bid at $800,000 and follow process detailed in city code to sell the property that was formerly called the DeMolay Memorial Building.
City approves lease amendment for Rec Center [2024]
“As the commission knows, this process is a little clumsy,” Doyon said. “I really don’t like this portion of the code.”
Doyon has asked the city attorney’s office to review the code for possible revisions for clarity.
He said the city has been criticized in the past about its process for the sale, lease or trade of city-owned property.
As the city was building the new Aim High Big Sky aquatic center, Doyon said he was planning to close the Rec Center since the facilities were being combined in the new building in Lions Park.
Early on, Doyon said, they considered retaining the old Rec Center to lease a revenue source, but after further consideration and needs, it’s “probably just best that the city disposes of that building.”
He said the city doesn’t make that decision lightly and discusses it with departments to to ensure there’s no future city use for the property.
Doyon told commissioners he was asking them to allow him, by consensus, to issue the request for bids and then make a decision based on the response.
City approves new recreation fees, including fees for new aquatics facility [2024]
There’s a tenant in the building currently who is aware the city is putting it out to bid, he said in September, and anticipates that party would submit a bid, but there would be other interest.
To sell city property, the code requires that the city take the highest responsible bid, with few exceptions, and a four-fifths affirmative vote by commissioners after a public hearing.
Parkland would require a recommendation from the Park and Recreation Advisory Board, but Doyon said he doesn’t think that applies in this case.
The commission could require a development agreement for the sale, but Doyon isn’t recommending that in this case.
Commissioner Joe McKenney, who is a real estate agent, said that the city could hire an agent to sell the property but that has an additional cost and since the city also has a legal department, it would be appropriate to sell the property itself without an agent.
City approves rec center lease for daycare [2023]
Commissioners, by consensus, said in September that staff should move forward with the process of drafting a request for bids.
The Rec Center is currently leased by the Community Early Education Center, a local company.
The lease was initially approved in January 2023 through Dec. 31 for $1,500 monthly.
Commissioners approved a lease with A Child’s World LLC in January 2023 for certain areas of the building to operate a daycare and included access to the outside play area and gymnasium upon availability.
City considering lease renewal for daycare in rec center [2022]
In June 2023, commissioners approved an amendment to the lease agreement for A Child’s World to expand its current location on the first and second floors for an additional 58 cents per square foot.
In October 2023, Commissioners ratified a merger agreement between A Child’s World and Community Early Education Center, which is the surviving entity.
After that, the Community Early Education Center wanted to expand to provide more jobs and childcare programming and in January 2024, commissioners approved a second amendment to the lease agreement.
City reopens proposals for Rec Center cafe [2019]
That amendment added leased space on the main floor for $850 monthly for kitchen space and $812 monthly for the dining area.
The Community Early Education Center again wanted to expand within the city’s Rec Center and an amendment approved during the June 4, 2024 meeting gives the entity full access to the property for $7,000 monthly through the remainder of the agreement.
The childcare agency assumed responsibility of paying all building utilities, and maintain and repair the building at its own expense.
City seeking proposals for cafe space at Rec Center [2018]
All of the other terms and conditions of the January 2023 contract remained in effect.
The city has had an agreement with A Child’s World since November 2003 for use of certain areas in the Rec Center.
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