ELY – The historic Community Center building here is destined to become a 28-room boutique hotel following a vote by the city council this week to accept a purchase agreement and business plan …
ELY – The historic Community Center building here is destined to become a 28-room boutique hotel following a vote by the city council this week to accept a purchase agreement and business plan by a developer and approve an ordinance authorizing the sale of the landmark.
Matt Stupnik, of Dellwood, Minn., agreed to the purchase price of $2 for the building and has three years to complete his plan to remodel the former Community Center into a boutique hotel “to serve travelers who are looking for a year-round get-way that would complement their back country, biking, shopping and business experience.”
City attorney Kelly Klun said Stupnik worked with city officials for the past year in developing his plan. Following a public hearing Tuesday night, and second reading of the land sale ordinance, council members voted to authorize the sale. “We intend to close on the transaction within the next week,” Klun said.
No one attended the public hearing. Klun offered details of Stupnik’s plan that have previously not been made public.
The main level retail area would contain a wine and beer bar, kitchen, lobby with espresso bar and hotel rooms. The auditorium stage would be updated for performances and serve as a small event space.
The business plan also describes that half of the auditorium would be converted into one-and two-bedroom units. In addition, atrium-style windows/skylights near the stage would bring in much needed light. The units would gain roof access through a working skylight on the roof, in addition to a projector room conversion into a penthouse with roof access.
“As the building is on the National Historic Registry, certain parts of the building would definitely be kept in their natural character,” Klun said. All the common area corridors would be maintained, from the travertine marble to the terrazzo floors. In addition, the moose mural would be preserved.
According to Stupnik’s plan, the basement of the 100-year-old building would be converted into a retreat-style spa center with mineral baths, a steam room and sauna, with the potential for additional services as the business grows.
“In terms of employment, he would employ eight to ten individuals to run the business when it is fully operational,” Klun said. “He expects to pay for as much as 12,000 construction labor hours, roughly equal to $1.5 million to $2 million, over the course of the project.”
The current construction plan time frame would be three years, starting in January, 2023. The project will be done according to the National Park Service’s (NPS) Book of Standards for Renovation and Adaptive Reuse. Stupnik’s Community Center renovation plan has recently been approved by the State of Minnesota’s Historic Preservation Office, “and now awaits full approval and Allocation Certificate from the NPS.” The certificate is expected sometime this fall and the three-year construction project would start in 2023.
“If he does not complete the building reconstruction within three years, or does not make meaningful progress, as determined by the council, the council could take back the building,” Klun explained. “There is a right of re-entry that is attached to the purchase. Although he is paying a very nominal purchase price of $2, we understand the building project (cost) is significant and if he does not follow through, the council can take back the building.”
She continued, “Ideally, we want this to be successful, of course. I think he has presented a fairly-detailed plan. He has worked with architects. He has done a number of projects. His background is in solar construction, so he does have a construction background.”
Mayor Roger Skraba said he was impressed with the building plan. “Some of us have seen some of the working drawings, and the stage is part of areas of the building that have to be kept natural. That is a fairly substantial and large area,” he said. “Our community may not be able to use the CC like we used to, there could still be some use of it. I am optimistic.”
Skraba added, “Our biggest concern is parking. We pretty much expressed to (Stupnik) that, under no uncertain terms, if it is not there, there will not be a certificate of occupancy issued. He has to have at least a minimum of 26 or 28 parking spots. In three years, there will be at least 26 or 28 parking spots.”
Klun reiterated that in the purchase agreement, a list of “milestones” to be completed addresses the parking issue. “Within three years, the buyer must secure and develop the necessary parking required for the project scope, as determined by the city.”
In addition, “When project requirements have been sufficiently identified, the buyer shall prepare and periodically, not less than two times a year, update the project schedule for the city’s review. The project shall identify items that affect the project’s timely completion.”
Skraba said city officials anticipate that construction labor costs could be $2 million. “Material costs will likely be equal, so we estimate this could cost him as much as $4 million,” he said. “And $5 million is not far off. His financing is predicated on some of the value of the building. There is a window that closes for him by the end of the year for him to have the opportunity to apply for matching dollars.”
Skraba expressed enthusiasm for the project and the developer. “He’s been very upfront and honest about everything. I feel comfortable in working with him. He is in the business,” he said. “Refurbishing old buildings is the trend, rather than tearing down. This is a unique opportunity. Hopefully the building will be saved and reused. We don’t want to have to take it back and start all over again. We want this project to be successful.”
Before voting on the ordinance during the council’s regular meeting. Council member Al Forsman said, “This is exciting that something valuable to our community is being proposed here. This is a significant investment in our community that is being put forth. This will be generating dollars, both in jobs, improving the property and taxes.”
Council members voted 5-0 to approve the ordinance for the sale of the Community Center. One council member, Heidi Omerza, was absent from the meeting. Council member Angela Campbell abstained from voting on the measure.
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