The city of John Day received bids from two local parties for the Weaver Building on Main Street.
Harsh Patel bid $70,000 for the downtown mixed-use building with plans to complete remodeling work by next year.
Tyler Sheedy and his wife, Krista Qual, bid $125,000 with plans to complete the remodeling in three phases that could last 3-5 years.
Both parties wanted the city to carry the financing and planned to use income from commercial rentals on the ground floor and residential rentals on the second floor to pay the city.
The city bought the 120-year-old, 12,000-square-foot building in November 2017 using a $100,000 Main Street Revitalization Grant from the state.
At the time, the building housed four businesses on the ground floor, Naturally Yours, Etc., Karen Barntish LTC and H&R Block, along with six upstairs apartments, one of which was occupied. Naturally Yours moved out of the building in February 2018, which freed up one of the retail spaces for demolition and remodeling.
The city hired Alpine Abatement to remove asbestos and lead paint from the interior walls of the vacant ground floor unit and all 6,000 feet of the second floor. Many of the walls were stripped down to studs, with most of the $75,000 abatement cost covered by a state Department of Environmental Quality brownfield grant.
The council held a public hearing on proposed conditions for the sale of the building on May 28. City Manager Nick Green said the real market value of the building and lot was $138,960. The city agreed to accept installment payments for the building, which qualifies for a 15% rebate on eligible improvements through the city’s urban renewal incentive program.
Patel, whose father owns Dreamers Lodge Motel in John Day, said he wanted to create eight quality residential units upstairs. He estimated the total cost to remodel the building at about $500,000.
Patel said an engineer and an architect looked over the building for him. He said the ground floor units were not ADA-compliant and did not meet fire code. He said he was advised to demolish the building and start over but didn’t want to do that.
Patel said the city loan could be paid off in a couple years, but the sale would be contingent on further due diligence by the city. He said he wanted assurances about termite damage or rotting foundations in the aging building.
Sheedy, a local building contractor, and his wife described their experiences in the rental business in the John Day area. They also planned to build eight residential units upstairs.
Sheedy said he planned to do much of the remodeling work himself but noted that the project would require engineering that could make the project more expensive and complicated.
A fire-protection barrier of double sheetrock was needed between the ground floor businesses and the upstairs residences, so the three current tenants would need to move out one by one while the work was underway, Sheedy said. He estimated remodeling costs at about $236,000, excluding engineering, and about $43,000 in rebates.
The building has at least five levels of historic construction, Sheedy said. His plans include a facelift for the front of the building in line with the downtown vision promoted by Kim Randleas. Use of brick or stone veneer could create a similar look to the historic Grant County Bank and Johnson Bros. buildings on Main Street, he said.
Mayor Ron Lundbom asked what would happen if an inspection found termite damage or rotting foundations, but both bidders assured the city the project was doable.