Funeral home offers to buy entire Pelican city hall complex
Local News | Published on August 3, 2022 at 3:50pm CDT | Author: Pelican Rapids Press0
By Louis Hoglund
The offer is on the table, with Larson Funeral Home proposing a purchase of the entire Pelican Rapids City Hall building.
Under the proposal, Larson would operate the funeral home on the upper level—and rent the lower level to the city of Pelican. The council approved a sale of the upper level to the funeral home in May, with the city retaining the bottom floor—but this new proposal would bring the entire complex under the funeral home’s ownership.
The pitch was delivered at the July 26 Pelican City Council meeting by Chris Smith, Vertin Funeral Homes, the parent company of Larson.
Terms outlined by Smith include a purchase price of $150,000. Plus, Larson would assume the total cost of installing sprinkler systems for both levels—at an estimated cost of about $100,000.
Smith proposed a ten-year term, with the city lease on the lower level at $10 per square foot.
If the city council chose to build a new city hall, which has been a very preliminary idea, the termination of the lease would be negotiable, said Smith.
Each entity would be responsible for gas, heat, electric, and sewer-water, added Smith.
In May, the council agreed to sell the upper level to the funeral home. Ownership would be structured similarly to a two-owner condominium.
At that time, Councilman Steve Strand made a more-or-less off-hand remark that the funeral home should buy “the whole thing.” Strand had been one of the councilmembers most vocal in opposition to continued city investment in the building—which he believed was aging and impractical. In the past, he’s advocated for a new city hall.
Smith and the Vertin Funeral Homes evidently took Strand seriously, which prompted the offer last week to buy the entire complex.
The council took this new proposal under advisement. City attorney Lindsay Forsgren said that more research would be necessary prior to the outright sale of the building—and a public hearing may be required prior to a sale being finalized.
When built in the early 1960s, as headquarters of the regional Lake Region Electric Cooperative, the building was a substantial addition to the community. Bell Bank later bought the building, leasing the lower level to Pelican city. Nearly ten years ago, the city purchased the building from Bell for about $200,000. Since the city bought it, several hundred thousand dollars have been spent by the city on air handling, and interior and exterior renovations.
The top floor was largely vacant and unused for more than a decade. Prior to the funeral home’s interest, the council had no viable plans, or serious outside inquiries, for redevelopment of the top floor. In its completely unfinished condition, there had been little motivation for a private party to consider the cost of refurbishing the space.
An ambitious plan to redevelop the upper level as a community-event center and commercial kitchen was ultimately defeated by the city council. Exterior renovations were completed, along with the lower floor for city hall—but the top level has been an unimproved shell for about five years.
Estimated price for the renovation and construction of the funeral home’s upper level has not been revealed, but based on city estimates from several years ago—pre-inflation—the funeral business investment in Pelican Rapids could easily hit $1 million. Especially with Larson’s plans to construct a two-stall garage, and other improvements.
The funeral home’s timeline for renovation and occupation of the upper level is estimated at about nine months.