The Three Sisters buildings in downtown Blue Earth have deteriorated beyond repair.

The Three Sisters Saga opened a new chapter at a Blue Earth City Council meeting held on Monday, May 6.

The vacant Main Street buildings are currently owned by Project 3 Sisters, LLC, although they have been largely neglected for the past few years and are showing signs of deterioration.

Project 3 Sisters, which was formed in March of 2019, took ownership of the three buildings at that time with the intent of rehabilitating them.

The LLC entered into a purchase agreement with Blue Earth and its Economic Development Authority to gain ownership of the properties, with the development agreement stipulating several deadlines for the project’s progress.

The project became a source of concern for the city as the deadlines passed without clear progress being made.

After much discussion and disagreement, the council voted to sever its ties with Project 3 Sisters in October of 2021, and granted the LLC full ownership of the buildings.

When the project’s progress halted soon after, the council expressed interest in renewing ownership of the buildings so measures could be taken to prevent further deterioration.

The council received a proposal from Project 3 Sisters’s attorney in May of 2023 which stated the LLC would consider returning the buildings to the city if they were reimbursed for $180,000 in funds which had been invested in the buildings’ improvement, and gifted $240,000 to cover design costs.

The council unanimously rejected the proposal, arguing the request for reimbursement had no validity.

City attorney David Frundt had better news for the City Council at its meeting on May 6.

“(Project 3 Sisters) is willing to go forward with turning over the property to the city,” Frundt said. “I indicated that were that to happen, they would need to bring their taxes current. It’s around $4,000.”

He also clarified that Project 3 Sisters is no longer seeking the reimbursements which were requested a year ago.

“I would like some guidance from the council,” Frundt continued. “Do you want to stick to your guns about them paying the taxes? Or, if they do not have the ability, move forward with getting the properties back, knowing that we would be paying a significant portion of the taxes ourselves?”

He observed that, were the buildings to be left under the ownership of Project 3 Sisters, and if the LLC remained delinquent on its taxes, the properties would eventually be forfeited to the state, and then the county.

“The timeline to get to that point of return is longer,” Frundt explained. “If we leave (the buildings) in the county’s hands, we won’t get them back for three to five years.”

City administrator Mary Kennedy also informed the council that most likely, the buildings will have to be demolished once they return to the city’s ownership.

“The judge did sign a warrant for us to go through the property, and it is significantly deteriorated,” she said. “It is really pretty heartbreaking walking through the buildings. They will need to come down.”

She added, “Whatever decision is made at this point, we probably need to move more quickly than not because it could be a significant health and safety hazard. The buildings are just absolutely deteriorated.”

The council inquired if funding is available to offset the cost of demolishing the buildings.

Kennedy explained that typically, the state funds a grant program which the project could qualify for, but the program is not currently funded.

“There is certainly time to let the legislature know that we need that project funded for next year,” Frundt considered.

Mayor Rick Scholtes also suggested staff could see if the city would have the ability to fund a demolition project through bonding.

The council granted Frundt the authority to negotiate with Project 3 Sisters regarding their delinquent taxes, with the end goal of reverting the buildings’ ownership to the city of Blue Earth.

“We could take possession of the buildings now, and determine how to take them down, and when, later,” Frundt said.

Kennedy added, “I want the council and community to be prepared to see photos of them. When you do, it is very disappointing. It didn’t have to be that way, but it is what it is at this point.”