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The city is prepared to give developer David L. Ulrich the South Block and an adjoining parking lot for $1, while giving him $950,000 to use on a project there.

The Common Council voted Wednesday to hold a public hearing on the deal Nov. 17, followed by a vote the same night.

Ulrich City Centre, the company formed by Ulrich to manage the South Block, plans to build two rows of commercial buildings on the downtown site, one along Main Street and the other along Walnut Street, for an estimated$4 million.

The city also would abandon Heritage Court, a one-way alley that runs east-west through the project site, to Ulrich.

The city is making a commitment to give Ulrich $500,000 it won in damages in a breach-of-contract suit against former South Block owner Elmer A. Granchelli; $250,000 in money it saved over the years from its "bed tax" on hotel and motel bills; and a $200,000 state grant.

Also, the city pledges to apply for an additional $200,000 state small-cities grant for work on city property near the South Block.

Asked why the city was not making Ulrich pay any more than the token $1 for the land, Mayor Michael W. Tucker replied, "That property's worth only what someone wants to pay for it. No one wants to pay anything for it."

He said that when the city issued a request for proposals, it received no offers from anyone who wanted to buy the parcel.

Tucker said Ulrich is "putting quite a bit of money" into the project, about $3 million of his own funds.

Ulrich attended the meeting but declined to comment.

In other business, the Council:

Set a public hearing for 6 p.m. Tuesday on the 2005 city budget. A few minor cuts were made in the spending plan Wednesday, reducing the proposed property tax increase from 7.1 percent to 6.9 percent. Final passage is expected Nov. 17.

Ratified a new five-year contract with Local 855, American Federation of State, County and Municipal Employees, retroactive to Jan. 1, 2003, giving all AFSCME workers $2,000 in retroactive raises, plus increases in base salary of $1,000 in 2005 and $1,100 each in 2006 and 2007.

In return, the union agreed to join other city unions in a new single-carrier health insurance plan, which the city expects to generate substantial savings.

AFSCME is the fourth union to make an agreement this fall, joining the police, the firefighters and the Civil Service Employees Association.


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