Lake Elmo reviews options for Old City Hall; council asks staff to explore leasing and partnership before demolition

Community Development Director Stopa presented the Lake Elmo City Council workshop with six options for the city‑owned Old City Hall property, describing the building, condition, maintenance costs and constraints and asking the council for direction on next steps.

The Old City Hall, built in 1986, is a single‑story, wood‑frame building of about 2,800 square feet on approximately 1.5 acres, Stopa said. The building has been mostly vacant since the city moved to a new City Hall in 2023; it is occasionally used for meetings. Stopa cited a 2017 space‑needs study attached to the workshop packet that listed roughly $862,000 in short‑term repair needs, about $80,000 in mid‑term items and about $38,000 in long‑term items; the study and staff observations identified exterior‑envelope and parking‑surface needs among the largest short‑term costs. Stopa also said insurance for the vacant building has risen to just under $7,000 annually and utility costs run under $2,000 a year.

Why it matters: The property is 1.5 acres in the city’s village area, abuts a school district parcel and has encumbrances such as water and sewer easements and other site constraints. Any decision affects parking availability for city events, site value, future tax revenue and potential partnerships with adjacent redevelopment.

Options presented and staff comments

Stopa presented six options: 1) demolish the building and create green space; 2) demolish and expand parking (the staff‑favored option); 3) sell the building for business use; 4) lease the building to a private tenant; 5) retain ownership and revisit later; and 6) monitor the adjacent school redevelopment and seek a partnership so the city could retain or sell the parcel as part of a larger redevelopment. Stopa noted physical constraints—existing encroachments along the northern property line, utility easements along the southeast and stormwater restrictions along the west—that may limit development or sale potential.

Council response and requested follow‑up

Several council members said they preferred leaving options open rather than immediate demolition. Council members asked staff to: obtain an updated cost estimate to remedy the building’s short‑term and exterior defects, have the building official inspect the structure and confirm whether it is currently leasable or occupiable, analyze realistic additional parking counts for partial or full lot conversion, and solicit nonbinding expressions of interest from potential lessees or nearby developers (including the school district’s prospective developer) to test market demand and partnership opportunities. One council member argued that a short‑term lease with flexible terms could attract small local businesses while preserving the city’s long‑term options.

Staff noted tradeoffs: demolishing for parking would provide immediate spaces (some estimates discussed more than 30 additional stalls if fully developed) but could trigger stormwater‑management requirements; selling or leasing the building could generate tax revenue but parking and access constraints would remain; monitoring the adjacent school parcel or partnering with a future developer could increase the site’s value but has uncertain timing.

No formal action or vote occurred at the workshop. Council members asked staff to return with cost estimates for demolition and for front‑lot parking construction, an assessment of habitability and any code work needed to lease the building, and a plan for outreach to potential lessees and the school district’s developer. Staff also noted the EDA intends to review publicly owned surplus property in 2026 and that further review will follow with the parks and planning commissions as needed.

What’s next

Staff will commission or assemble updated repair and demolition cost estimates, an occupancy/habitability assessment from the building official, and an analysis of parking‑lot yields and stormwater implications; staff will report back to council with findings and options for a next‑step decision. The council did not direct immediate demolition and left multiple options on the table pending those analyses.