EDA review finds 'cable house' rental would lose money first year; board asks for refined repair quotes and council input

EDA staff presented a rent-analysis for the EDA-owned property known in the discussion as the “cable house,” laying out repair costs, operating assumptions and a three-year revenue projection.

What was presented: Dan described the property as a 2,000-square-foot, four-bedroom, two-bath house on Lake Lane and said a quick visual inspection suggested repairs likely in the “15 to $20,000 plus range.” He said the EDA has budgeted $20,000 for repairs in the 2026 budget and that staff had not obtained a contractor quote yet. “I think overall, the repairs are estimated gonna be somewhere in that 15 to $20,000 plus range,” Dan said.

Staff modeled a first-year scenario that included start-up repairs, a third-party management fee (estimated at about $4,000 annually using Renters Warehouse), repair and maintenance estimated at roughly 10% of rent revenue (about $2,500), taxes and insurance. Using an assumed rent collection of about $25,800 the first year (Dan said that figure was based on prior rents and market checks), the analysis showed an estimated first-year deficit of roughly $6,800; by year two the projection moved toward break-even and by year three a modest positive annual contribution (staff projected roughly $13,000 annual net in a steady-state scenario absent major breakdowns).

Debt-service and sale implications: Dan noted the property’s debt is held by an internal interfund loan (the SAC fund) and that selling the property could free about $20,000 of annual debt-service expense to reallocate for marketing or other initiatives. Board members debated whether to hold the property for redevelopment control or to divest and use proceeds to fund downtown marketing and programs. One member said the EDA is “sitting on 43% of our total budget in property costs,” urging reduction of property burden to free up funds.

Requests and next steps: Members asked staff to obtain firm, site-specific repair quotes (contractor inspection) to replace visual estimates and to bring the refined numbers to the city council during the upcoming budget workshop for direction. Dan recommended that, if the board chose to rent, the EDA lock any lease for roughly 18 months to recoup startup costs.

No final decision was made; members agreed the issue should return as a voteable item once staff provides refined repair estimates and after council input.