Wheeling Taxpayers Investing $650,000 Into 1107-1109 Main St. for Private Developer
WHEELING — With a signed agreement, city taxpayers’ investment in the purchase and rehabilitation of 1107 and 1109 Main St. will grow to $650,000 — all so the properties could be sold for a minimal price to private developers in the hopes they will be rehabilitated.
Those private developers — Gabe Hays and Egin Guler of Main Street Ventures — will, in turn, invest $1.29 million of their own money into the buildings, or slightly less than double the taxpayer’s investment.
Details of the plan for 1107 and 1109 Main St. are outlined in a development agreement approved by Wheeling City Council earlier this month. City officials and the developers signed the agreement this past week, Vice Mayor Chad Thalman said.
With the agreement signed, ownership of the two properties was transferred to Main Street Ventures for a nominal fee, Thalman said. Such property transactions with the city typically come for $1.
The city’s investment
Through the agreement with Main Street Ventures, the city committed to spending $350,000 to aid restoration of the properties, on top of $300,000 spent earlier to purchase the buildings.
Of the $350,000 the city will contribute to the project, $300,000 was previously set aside in 2016, Mayor Glenn Elliott said. The money will come through the city’s general fund through cash carryover allowances.
The money will go toward major structural repairs to the buildings, as the developers plan to bring a coffee shop to 1109 Main St. and a sit-down restaurant with an added deck area to 1107 Main St. The upper floors will be used for apartments.
“It’s a really good project for downtown Wheeling development and I’m excited about the potential,” Elliott told city council this month. “I recognize it would be nice if the private sector could do these projects without any assistance, but we’re just not there yet for buildings this vintage and of this age.”
The city’s history with the buildings, which were built in 1900, date back to The Health Plan of West Virginia’s 2016 decision to locate in Wheeling.
The previous city council purchased the buildings as part of the incentive package to bring the Health Plan to Wheeling, Thalman said.
The city bought 1107 Main St. in January 2016 for $160,000 and bought 1109 Main St. in March of that year for $140,000, for a total purchase of $300,000, according to the Ohio County Assessor’s Office.
The previous city council, led by former Mayor Andy McKenzie, originally intended to tear down the properties, but the current council eventually decided that redevelopment was the better option.
Elliott has said that tearing down 1109 Main St. would compromise the structural integrity of 1111 Main St. and that tearing down 1107 Main St. would yield a small property unattractive to developers.
In recent years, council heard development plans from other firms, but they couldn’t “get the numbers to work,” Elliott said. Then, in December, council’s Development Committee heard from Hays and Guler and moved forward with the developers.
The rehabilitation project and a timeline
The development agreement outlines how the project will work, including various benchmarks and timelines for construction.
For example, roof work on 1107 and 1109 Main St. will cost $100,000 and is set to be completed within six months of the properties’ transfer to the developers.
Other work includes waterproofing and abatement at 1107 Main St., which will cost $150,000, and front facade work on both buildings, which will cost another $150,000.
The project also includes constructing a rear egress tower that will connect to the two buildings and 1111 Main St., which is privately owned. The tower will cost about $250,000 and allow the upper floors of the buildings to be used.
Per the agreement, Laura Mull, owner of 1111 Main St., will contribute $20,000 to the tower’s construction.
The agreement also calls for Mull to update the front of her building, which will cost about $150,000 and will not be paid by the city or the developers, according to the document.
The document also includes provisions that if certain benchmarks aren’t met within 36 months, the unspent money dedicated to 1107 and 1109 Main St. will be returned to the city.
The agreement further states that if analysis determines waterproofing 1107 Main St. will be more costly than anticipated, the parties will discuss whether to move forward with the project or if more taxpayer funding is needed.
In addition, Thalman noted that similar redevelopment could happen at the four buildings the city owns in the 1400 block of Market Street.
“I believe city council would be willing to work with developers in a similar way to get that site developed,” he said.
The only business currently operating in the Market Street properties is the Market Street News.
Additional taxpayer spending for the project
In addition to the purchase, Mayor Glenn Elliott confirmed taxpayers also paid local realtor Heather Slack a $4,800 commission for promoting 1107 Main St., or 3 percent of the building’s purchase price.
Elliott said Slack created a proposal to redevelop 1107 Main St. that was accepted by City Council, and recently she has worked with Main Street Ventures to find “shared solultions” for the buildings.
Elliott and suspended city manager Robert Herron discussed the matter several weeks ago and agreed the 3 percent commission was appropriate, the mayor said.
“This city council has made marketing the 1100 Main Street properties a high priority since 2016,” he said. “In the real estate market, when you are a seller marketing properties with an actual sales price, it is customary for real estate agents representing buyers to get up to 3 percent of that price. … The bottom line here is that when you’re trying to market properties with nominal or negative value, you need to provide incentives to encourage the private real estate market to participate.”