DeKalb faces backlash over plan to acquire ‘underperforming’ building to aid downtown parking

DeKALB – DeKalb city leaders traded barbs this week when questioned about a plan to consider acquiring and demolishing a 133-year-old building described by city staff as “underperforming” to grow downtown parking.

During the City Council meeting, city leaders were briefed on a proposal that would pave the way for additional parking spaces by razing a two-story, 18,500-square-foot building at 128 to 140 S. Second St. Under the proposal, the city would acquire the building, built in 1890, under eminent domain.

Since the early 2000s, civic and community leaders from various groups, both active and defunct, have come together to revive downtown DeKalb, according to city documents. Among the challenges these entities have long found is access to parking and circulation. The city has identified tax increment financing funds to pay for such public investments in the past, city documents show.

Discussions between City Manager Bill Nicklas and the owner of the building, Dan Sears of D-N-J Properties, about the potential for a real estate transaction date back to January, documents show.

Sears alleged that the process of working with the city has been one “met with nothing but threat and intimidation.” Sears also disputed the city’s account that he’d not been making an honest effort to negotiate.

“To find out that the opinion of what’s written here in the agenda was to suggest that we were not negotiating in good faith was disturbing,” Sears said.

City staff called the building’s exterior “seriously deteriorating” and alleged that the building’s condition reveals “a lack of any serious attention to routine maintenance,” according to city documents.

To find out that the opinion of what’s written here in the agenda was to suggest that we were not negotiating in good faith was disturbing.”

—  Dan Sears of D-N-J Properties, owner of 128-140 S. Second St. in downtown DeKalb

Sears also said he takes issue with the city for suggesting that his property is “underperforming.”

Nicklas disagreed.

“It was never personal from the beginning,” Nicklas said to Sears. “I never said we’re going to come after you and make you pay. You know me. You’ve talked to me for a long time. … That’s not the way I operate.”

According to city documents, the city is looking to acquire the property through eminent domain should it not be able to come to terms with purchasing the building from the property owner.

Nicklas said he is not happy to be talking about eminent domain.

To date, all offers on the table made by the city have been rejected by the property owner, documents show.

The city has since performed an appraisal of the property, valuing the building at $243,000, according to city documents. That appraisal has been communicated to the attorney who is representing the property owner along with an offer valued at $275,000.

Nicklas said the city would rather get the property owner to return to the table for negotiation.

“We could have battling appraisers, which we did ultimately with [former local landlord] Hunter Properties, as you may recall,” Nicklas said. “Ultimately, those two appraisers hired a third, which we all agreed to accept the price from. We’re tired of no cooperation. It’s been over six months since we started the process.”

City Attorney Matt Rose said the city still is interested in negotiating, despite the hurdles it has faced to be able to get its own appraiser inside the building.

“Regardless of all of that, we are still willing to negotiate for the fair market value,” Rose said. “We don’t want to have to go to the route of having to litigate this. Part of that negotiation was our willingness to agree to the extension to have their appraisal come in at the 11th hour and tell us what it is. We are more than happy to hear that. We are more than happy to have Mr. Sears give us whatever information he has to say that it’s the fair market value and then we can consider that.”

Nicklas also disputed Sears’ concerns that city leaders were unfairly calling the property underperforming.

“It wasn’t unkind for me to say it; [the building] was underserved,” Nicklas said. “There is one tenant there, but you don’t have 1,800 square feet – not even close to that. It’s underserving when the cost of the mortgage and insurance and other costs are not being offset by the income. It’s not meant to be harsh, it’s meant to be factual.”

Second Ward Alderwoman Barb Larson said she wanted it to be clear what the City Council would be doing by acquiring the property through eminent domain.

“Eminent domain is not taking,” Larson said. “It’s buying at fair market value.”

Seventh Ward Alderman John Walker said the proposal is more nuanced.

“If I had $5,000 and I went to somebody and was like, ‘I want to buy your car for this now,’ ” Walker said, “no matter what you want it for, this is what I want it for. Somebody was made to tell that person that they had to get rid of it for the price that I wanted it for. To that person, that’s taking – no matter how you look at it.”

Sixth Ward Alderman Mike Verbic said he would like downtown-area businesses to be mindful as the city tries to find a middle ground that can work for everyone.

“I understand that this has really been driven by the property owners that are looking for more parking, the alley way, easier deliveries, those kinds of things,” Verbic said. “I understand they, too, are property owners like yourself, but how does everybody get together on your block and sort these things out together, I think, is the neighborly thing to do. I’m not hearing that that’s taking place.”

A motion was approved in a 4-3 vote to table the matter for further discussion and potential consideration as early as the council’s July 10 meeting.