• Last modified 2441 days ago (Aug. 15, 2012)


Business closure puts city in tight spot

News editor

The closure of Arlie’s Paint, Body, and Glass earlier this month poses a big financial risk to the City of Marion unless it can find another business to move into its location, but that relief may come.

The city didn’t learn about the closure until after Marion City Council approved the 2013 budget, which included plans to refinance the final payment of the lease-purchase for the property, City Administrator Doug Kjellin said Tuesday. The budget does include funding to pay the full amount outright.

“We were concerned, but there was nothing known,” he said.

The city owns the property and used a lease-purchase to pay for improvements. The balance of the city’s lease-purchase through Cottonwood Valley Bank in Lincolnville on Aug. 1 was $238,580; the beginning balance was $254,519 in August 2008. The final and largest “balloon” payment is due mid-2013, although the city planned to refinance then, Kjellin said.

Without a business in the building to make those payments, the city would be responsible for the equivalent of about $240 of property taxes on a house appraised at $85,000 — the median home value in Marion County.

Kjellin began working for the city as economic development director in July 2008 after agreements for the lease-purchase were in place, but he thinks the city wanted to take an active role in economic development at the time.

Unfortunately the national economy went into a prolonged slump starting in 2008.

“Was it the wrong decision at the time?” Kjellin asked himself. “We can speculate either way.

“I think I’d do it again,” he said. “I think the city must grow, must continue to gain. If we’re not growing, we’re dying.”

Although Arlie’s eventually closed, for most of four years in that location it provided sales tax and property tax revenue to the city, as well as providing jobs, so Kjellin believes the decision was a valuable investment.

Arlie’s wasn’t a brand new business when owner Arlie Overton made his agreement with the city. The business had been in town since 2003, and the move was an expansion, Kjellin said.

Fortunately there has been interest in the property. Kjellin said someone had asked to see the facility to consider purchasing it. Any steps beyond that would require involvement of City Council.

Last modified Aug. 15, 2012