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MARION — As purchase negotiations continue longer than expected for the Marion Square strip mall, the possible site of a new building that would include an expanded Marion Public Library, a gym has become the first business there to announce it's moving out because of the retail center's uncertain future.
The long saga of finding a bigger home for the heavily used library has had its share of fits and starts. The latest: On one hand, a developer has expressed interest in the site of the current library for a mixed-use project. On the other: Businesses that could be displaced by the move are anxious over, among other things, costs they face.
The Marion Square mall, along Seventh Avenue, was identified as the preferred spot for Minnesota-based developer Ryan Companies to purchase, demolish and build a mixed-use building with retail and residential space. It would house a new Marion Public Library in a space about twice the square footage of the current library nearby.
Anytime Fitness, located in the strip center since 2007, announced last week it's moving about six blocks away.
Owner Travis Salter cited uncertainty with the future of the mall as the reason for moving. Ryan Companies has not yet reached a deal with Nebraska-based developer Noddle Companies, the current owner, to buy the mall.
Salter closed on a strip mall containing the addresses 501, 503 and 505 Seventh Ave. at the end of June. He said he plans on moving Anytime Fitness to that location in late fall or early winter, once the building is reconfigured for the gym. Plans also could include an addition to the building, Salter said.
'It's very important that we stay in the Marion community,' he said. 'We have a lot of people in here saying, 'Please don't move from downtown,' saying, 'You need to encompass old Marion and new Marion.''
But Salter said he has found his search for and transition into a different commercial space to be difficult. A restaurant, Yen Ching, has a lease for the building until the end of November, so Anytime Fitness cannot move until after then.
'We're trying the best to keep them (Yen Ching) in Marion,' Salter said. 'When we went through this whole negotiation ... I got a little backlash. Here we are being forced out, so the tenants of the building we bought got wind we were moving in. This is a domino effect.'
Salter said he also was approached by some of the business owners in the Marion Square center, who said they were unsure where they could move. Though commercial districts are cropping up along the east side of the city, it's difficult for a business to find another location with affordable rent, Salter said.
'It's not like these businesses couldn't move, but where would they move? The rates that we're paying here are market, but they're definitely not new construction,' he said.
If the Ryan Companies does close on a purchase of the strip mall, Salter said he hopes the city and the developer will help the business owners financially.
Marion City Manager Lon Pluckhahn said that though tax increment financing options, more commonly known as TIFs, could be discussed with business owners, TIFS are available for businesses only in designated urban renewal areas, such as the Uptown blocks and developments along highways 13 and 151.
Lydia Brown, director of development for Ryan Companies, said the developer would help businesses in the strip relocate in Marion.
'Ultimately everyone has the lease, and leases dictate who is responsible for what. Our objective is to be sure we're complying with those,' she said. 'We want those businesses to be as successful as they can be.'
Ryan Companies expected to close negotiations on the property by June 1. Brown said it has expanded the due diligence period with the Noddle Companies by another 60 days. August is now the target for closing on the Marion Square block, she said.
'We are working in conjunction with the city of Marion to be able to look at projects that might be beneficial in and around that area, so we're not just looking at that block,' Brown said. 'Because we don't have a project finalized, we are in the process of trying to figure that part out. We do think this is going to happen, but we have to figure out exactly what it's going to look like.'
One of those projects may be a parking structure, Pluckhahn said.
While purchase of the land is being negotiated by two private development companies, the approximately $12.3 million, 24,000-square-foot library project is on hold.
Pluckhahn said the plan is for the Marion Public Library Foundation to apply for a $10 million bond from the Iowa Finance Authority and purchase space in a new mixed-use building. The city then would lease the space from the foundation, in part through $5 million in already paid local-option sales tax.
Payments also could include money raised from the sale or lease of the current library building, between Sixth and Fifth avenues and Tenth and Eleventh streets. The city issued a request for proposals in March.
Pluckhahn said it received a proposal in May from Aspect Architecture and Knutson Construction. It is being reviewed by the city's economic development team, but Pluckhahn said he hopes to have a proposal in front of the City Council in August.
Steve Emerson, president of Aspect Architecture, said he would want to demolish the current library and construct a mixed-use building, with retail space on the bottom and about 75 residential units on top.
'To put more commercial and have the Marion school district grow, that's the only way it's going to expand: creating density in that area,' said Emerson, who also owns the building in Cedar Rapids where The Gazette is located.
The proposal includes plans for a possible two-story parking ramp on the lot between Sixth and Fifth avenues and Eleventh and Twelfth streets, a lot now owned by the city. The question, Emerson and Pluckhahn said, is whether the city, Aspect Architecture and the Ryan Companies would each finance portions of a parking ramp.
Previously unknowns with the Ryan Companies' project included parking for library visitors, tenants and shoppers. Brown said she had considered putting a small parking structure under the building, but that would be an expensive venture.
'It opens up a lot of opportunities,' Pluckhahn said. 'To have enough parking, would you rather concentrate parking into one structure or keep knocking buildings down? That's the choice you have to make in an urban area.'
And while Emerson said he understands there are residents leery of demolishing older buildings to make way for mixed-use spaces in the Uptown area around the library, he sees room for development.
'All their concerns are valid. I grew up and lived less than a mile from the library itself,' Emerson said. 'The city is making a bunch of changes. They're trying to preserve the historic buildings on Seventh Avenue. If they can create another retail corridor along Sixth, that's great. I don't know why both sides of that can't be appeased.'
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