Council authorizes negotiations on proposal to redevelop former Public Works building at 500 Second Street

Nathan Wasson of Glenstone Development presented a proposal to acquire and redevelop the city-owned former Public Works building at 500 Second Street, and the LaSalle City Council on a unanimous roll call authorized a committee to negotiate terms with him.

Wasson told the council the project would convert roughly 20,000 square feet of garage space into climate-controlled self-storage (about 230 units) and use a corner 5,000-square-foot former showroom for first-floor retail, a coffee shop and shared offices. He estimated the total conversion at about $2,330,000 and said the purchase price in his letter of intent is $260,000, to be financed by “a purchase money note from the city and forgiven once the project is completed, if completed within 2 years.” He proposed a 90-day due-diligence period followed by a 30-day closing window.

Why it matters: the building has been city-owned for roughly two decades and sits in downtown LaSalle; council members said putting the property back into productive use could improve downtown appearance and generate property-tax revenue. Wasson said he plans to use Illinois RERZ (River Edge Revitalization Zone) and federal and state historic tax credits to help finance the work, and he asked to be able to apply for the city’s façade grant program, funded by TIF, to prioritize streetscape improvements along Second and Right streets.

Most important facts - Purchase price in the LOI: $260,000, financed by a city purchase-money note that Wasson said would be forgiven if the project is completed within two years of sale. - Estimated construction cost to convert the building: $2,330,000 (Wasson’s estimate). - Proposed uses: first-floor coffee shop/retail and offices; climate-controlled storage across two floors (about 230 units); freight elevator to replace an existing ramp; removal of certain interior elements. - Financing: Wasson said he has a term sheet from lenders and expects to syndicate historic tax credits (he described the state credit payout as a one-year payout and the federal credit as a five-year payout).

Council action and next steps The council voted to appoint a negotiation committee to work with Wasson and city staff to try to reach terms. The motion to appoint a committee (including aldermanic members and named city representatives) passed on a roll call; the council instructed the mayor and the director of economic development, with input from city legal counsel and the finance director, to continue negotiations and return with a formal agreement if one is reached. The council also noted that other proposals remain possible while negotiations proceed.

Questions and concerns raised - Several council members pressed for security in any sale so the city can enforce development commitments. Wasson said he proposed an unsecured purchase note with a personal guarantee rather than a city mortgage, arguing that senior construction financing typically must be senior to any city mortgage; he said the parties would need to negotiate whether the city would require a mortgage or other security to preserve “teeth” in an agreement. The council agreed those details must be negotiated. - Some public-comment speakers and one alderman raised concerns about Wasson’s prior work with other developers; Wasson said he is “staying in LaSalle and Peru” and described himself as the sole local investor in the project, adding that tax-credit investors would be syndicate investors without operating control.

Timeline mentioned Wasson said he would like to start construction this year if negotiations and due diligence can be completed quickly and aims for aspects of the exterior to be finished in the same year, with broader project opening in 2026 if financing and approvals proceed on schedule.

What the resolution/committee authorizes The council’s motion authorized city representatives (mayor, director of economic development, city attorney/legal counsel and the finance director) to negotiate terms with Wasson and return to the council with proposed agreements for final action.

Provenance: the topic began with the agenda item presentation and concluded with the council’s motion and roll call authorizing negotiations; the council returned the item to staff for negotiation and future council consideration.