Sterling buying burned out downtown block to redevelop

STERLING – After negotiating with the owners of properties along the 400 block of East Third Street downtown that were destroyed or damaged by a fatal fire on July 7, the city will pay $138,000 for four sites it plans to redevelop.

Mike Mihalios, 72, of Chicago, the owner of 406-408, 412, and 414 E. Third St. sites, and of 301 Fifth Ave., the empty lot on the northwest corner of East Third and Fifth Avenue, agreed to reduce his asking prices to what would be the equivalent to the appraised value of the properties as vacant lots, according to information presented at Monday’s City Council meeting.

That would be $23,000, $23,000, $46,000 and $46,000 respectively. The first two lots are roughly 45 by 100 feet, the last two are 18 by 150 feet.

The city also will pay to demolish what remains at 412 and 414, and abate any asbestos, because Mihalios’ insurance will not cover the cost.

The city could have sought a judicial order to demolish those buildings, but that would come with added time and legal costs, so buying the sites is “probably the most effective way to deal with this property and get it taken care of,” City Manager Scott Shumard told the council members, who voted unanimously to buy the properties.

At the time of the fire, 412 housed a laundromat; the rest of the building was empty, as was the adjacent 414, which once housed an insurance company and was listed for sale online at $48,000.

The building where the fire began was demolished over three days in September.

That leaves one building remaining, at 302 W. Fourth Ave., which is owned by Kurt & Brian Properties LLC, and the now-empty lot at 304 W. Fourth, owned by Jestun Gatz of Sterling, where a two-story red brick building that was behind 302 was razed after being damaged by falling debris during the blaze.

Brian Carradus and Kurt Studnic are in the process of negotiating with the city for their two-story building, which housed two apartments and their property management office before the fire, Carradus said after Monday’s meeting, adding that it is salvageable if the city chooses to do so.

The city plans to approach Gatz next, Shumard said in an email after the meeting.

As for development plans, the city will issue a request for proposals, but before doing so, must complete an environmental assessment of the sites, which is underway, he said.

The fire began on the third floor of the three-story building at 406-408 around 2:20 a.m. on July 7; the body of Juan Antonio “Tony” Anaya, 62, was recovered July 11.

The ATF National Response Team is investigating the cause of the fire and has not yet submitted its report to the city, although it is expected sometime this month, Shumard has said.

The building at 406-408 had eight apartments on the second and third floors and 13 tenants. There were two vacant commercial spots on the first floor.