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The city of Fort Atkinson is hoping to purchase a third parcel associated with the former Loeb-Lorman scrap yard.

Council members Tuesday approved drafting an offer to purchase a two-acre piece from 2L Loeb LLC for $100,000 with some contingencies.

The parcel, located at 205 Hake St., is situated to the north and contiguous with a larger eight-acre piece which City Engineer Andy Selle described as “the bulk” of the former Loeb-Lorman operation. The eight-acre piece is among two parcels the city already has offered to purchase.

In a Dec. 30 memo to council, City Attorney David Westrick wrote that if the council agreed to the purchase of the Hake Street parcel, the offer to purchase would be an amendment to the Sale and Purchase Agreement for the former scrap yard parcels, located at 115 Lorman St. and 600 Oak St., which was approved by council mid-December.

The draft of an offer to purchase the Hake Street parcel was approved in open session, following the closed session meeting held Tuesday.

Contingencies, as listed in Westrick’s memo, include an option to purchase for Opportunities, Inc., a packaging and assembly services company, located on East Cramer Street.

Selle said the contingency provides Opportunities, Inc. with a first right of refusal, allowing the company up to five years to exercise an option to purchase the land from the city for $100,000 would it become interested in increasing the size of its campus.

Among highlights of the negotiated agreement, in his memo Westrick further noted that the city acknowledges piles of “dirt” on the property. Would the city determine that the dirt could be used in connection with remediation of the property, then the dirt would be used for that purpose.

Contingencies further note that the property is being purchased in “as-is” condition, with a closing date set to take place at the same time as the one set for the other two parcels the city has offered to purchase.

In a follow-up interview Wednesday, Selle noted that financing for the third parcel will be achieved by adding the purchase price to the State of Wisconsin Community Development Block Grant (CDBG) application being made by the city

“It will be added to that $1.4 million grant, so it was for $750,000 for the other two parcels and now it will be for $850,000,” he said.

In an earlier interview, Selle explained that the CDBG program is a retooling of one that formerly used a loan structure.

Facilitated through the Wisconsin Department of Administration (DOA), the grant is federally funded through the U.S. Department of Housing and Urban Development (HUD). It is a closed grant, Selle said, because the federal government is closing what formerly was a revolving loan program, opting instead to offer grants.

The program makes available funds up to between $1.4 million and $1.5 million for which the city of Fort Atkinson can apply. Projects outlined within funding applications must meet with the parameters of the grant, Selle noted.

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