K Street developer backs off sale

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By DEENA WINTER / Lincoln Journal Star

In the fall of 2004, Katie Halperin drove by an old power plant in downtown Lincoln and said, “My God. That’s the perfect building.”

At least that’s how her partner, Matt Maude, describes the moment that kicked off more than a year of working to buy the building from the city to convert into loft-style condos.

But on Monday, Maude and Halperin of Heathrow Development essentially abandoned that dream when they rejected the Lincoln City Council’s counteroffer to their May offer to buy the building for $5 million.

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Files stored at the K Street building. (LJS File)

Files stored at the K Street building. (LJS File)

In late December, the council approved a potential sale but tacked on 10 amendments — including a $50,000 deposit — that amounted to a counteroffer. Maude and Halperin rejected the counteroffer, saying the project no longer is financially feasible.

“Each amendment made it progressively more difficult to move forward,” Maude said. “Clearly, politically and economically, it just wasn’t prudent to proceed.”

The project has been pushed by Mayor Coleen Seng, who could not be reached for comment late Monday.

The building was converted by the city into a storage warehouse in the mid-1990s and now houses a few offices and tons of city, county and state documents. It’s leased to the Public Building Commission and subleased to the county and state, so they would have had to release the city from the leases.

The County Board strenuously opposed the sale, and the City Council and Public Building Commission didn’t seem very interested in selling the building either, Maude said.

“I may very well have misinterpreted the message they were communicating,” he said. If that’s the case, he and Halperin left the door open to revisiting the project.

Councilman Jonathan Cook opposed the sale and said he wasn’t surprised Heathrow was unable to make it work, because he thinks there were many costs not taken into consideration.

“I didn’t think that the deal was a good one,” he said.

He said some council members wanted to give the project a chance but “weren’t necessarily excited about it.” And the County Board was unlikely to budge, which would have stopped the project in its tracks, Cook said.

Maude said he and Halperin spent “a very substantial amount of money” to get to this point and said trying to purchase a building from the city has been “a real time vampire” and learning experience.

“It kept kind of piling straws onto the camel’s back,” he said. “It seemed like every time we got to the top of the mountain, there was another chunk of mountain.”

Reach Deena Winter at 473-2642 or dwinter@journalstar.com.