The sale of a city-owned retail space in downtown Rochester was approved Monday night.
The Rochester City Council voted 5-2 to approve a purchase agreement for the space at 255 First Ave. SW that once housed Dooley's Pub.
The agreement calls for selling the space for $1.4 million to Powers Ventures, while the city maintains ownership of the rest of the building.
“It will be different from anything we’ve ever done,” said Nick Powers, president of Powers Ventures.
Powers has said the company wants to create a restaurant with a relaxed and casual family-friendly atmosphere in the heart of downtown, but added Monday that he wants to keep some of the plans under wraps.
“We want a little bit of an element of surprise,” he said.
Council members cited concerns about the process behind the sale Monday.
Shortly after two months of seeking new tenants in the space, City Administrator Alison Zelms said Powers Ventures made an unsolicited bid to purchase the space.
Powers said the company considered an option to rent the space, but determined "financially, it just wasn’t viable,”
While city staff estimates a similar space could fetch $2 million to $2.5 million on the open market, City Administrator Alison Zelms said the city-owned building comes with some unusual requirements.
"This is a very unique property in the city's holdings," she said of the condo space that provides support for a public parking ramp, and includes the city's Bio Business Center.
The planned sale, which was first reviewed by the council during a closed July 12 meeting, will include the potential for closing the business for up to a year every 15 years to accommodate parking ramp upgrades.
If the city ever decides to demolish the ramp, it would repurchase the business for a set amount based on the length of ownership or the purchase price for the site.
What happened: The Rochester City Council approved an agreement to sell the city-owned space previously leased by Dooley’s Pub.
Why does this matter: The city failed to find a new tenant in May when Powers Ventures offered to purchase the space for $1.4 million and intends to open a new restaurant.
What's next: The council will review final documents at a later date.
Council member Patrick Keane said such requirements indicate price isn’t the only consideration in the sale.
"This is not the sort of deal where you go to the highest bidder," he said, adding that the sale appears to offer a better financial outcome than continued leasing.
Council member Nick Campion, who voted against the purchase agreement, said he agrees the proposal appears to be sound.
“I think this is a fairly equitable deal,” he said, explaining there were other reasons for his opposition.
Acknowledging it’s proper for a private business to make the offer and that city staff should present all available options, he said he was uncomfortable with the overall process.
“I have trouble with the perception about what happened, less than I have with the outcome,” he said, adding that he agrees with the idea of selling the property, rather than leasing it.
Council member Kelly Rae Kirkpatrick also cited concerns about the process, but said inquiries convinced her everything was legal and above board.
She also suggested the city consider selling other rental properties, including the connected Bio Business Center building.
“I do believe the city should not be a landlord in any of its properties,” she said.
Council member Molly Dennis, who opposed the sale, said the city should consider other options for the space.
“There’s a lot of different things we could add to downtown,” she said, adding that she’s heard residents ask for something catering to nightlife opened at the site.
"I feel like we should open this up again," she said, adding that she talked to Joe Powers, former Powers Ventures president, about the potential for delaying the sale, but he indicated it needed to happen soon.
Nick Powers said work is needed to transition the former bar by the end of the year.
“It’s come to a point to where it is either ‘go time’ or it’s not,” he said.
Zelms said Powers Ventures has placed a $100,000 check in trust to secure the sale and has approved conditions of the sale, meaning the process could move quickly with the council's approval.