City to advertise lease for Charles J.D. Kester House; council seeks cost estimates for remediation and maintenance

City staff told the council an outside party recently toured the city-owned Charles J.D. Kester House and expressed interest in leasing it. The property currently costs the city approximately $6,200 annually to hold (insurance roughly $2,200 and estimated property taxes around $4,000 for 2024). Staff said additional costs to make the building rentable remain unclear, particularly for mold remediation.

Councilmembers discussed minimum lease terms and whether a lease should require tenants to cover insurance, taxes and negotiated maintenance. Staff suggested a 12-month minimum lease could be structured so rent covers those fixed costs plus a negotiated maintenance agreement. Councilmembers cautioned against repeating past commercial-lease mistakes in which rents did not fully cover ongoing expenses.

Council directed staff to advertise that the city is seeking proposals to lease the building for a one-month advertisement period (through February) and return to council at the first March meeting with proposals. Staff was specifically asked to obtain firm cost estimates for mold remediation and to draft lease language that clarifies limits on city capital investment and tenant responsibilities. The council noted a family-restricted sale of the property precludes a sale until at least Dec. 2027, so leasing is a near-term option to reduce carrying costs.