Jim Williamson had been thinking about moving his car dealership out of downtown Lincoln when the city came knocking on his door a few years ago, Antelope Valley Project plans in hand.

The city wanted to dig the nearby Antelope Creek out of an underground conduit — moving land out of the floodplain — and revitalize a deteriorating section of downtown Lincoln.

Williamson had several car dealerships in the crosshairs.

The Williamson Honda owner’s property was spread out over several downtown city blocks, with his Honda sales and service departments separated by three blocks.

Since he was looking at combining and modernizing them anyway, he sold the city a portion of his property — basically everything east of 21st Street, where he owned four dealerships and the Honda service station — for $3.6 million in 2004.

He said he wanted $5 million, but sold it for less with the understanding the city would buy the rest of his property for $2 million within 18 months.

At the time, he said city employees told him they wanted to buy the rest of his property west of 21st Street, but didn’t have the money yet. So the city paid $75,000 for an option to buy the rest of his property, keeping it off the market for 18 months.

But when the time was up, the city was unable to exercise its option to buy the rest of the property.

Now Williamson feels like the city left him holding the bag, saddled with property that will be tough to sell until the Antelope Valley’s flood control work is done, and left with his sales and service and body shop miles apart.

“I’m stuck with property down there that’s tough to sell because of the flood,” he said, referring to past flooding in the area. “Frankly, it’s a liability, not an asset.”

After selling his eastern property to the city, Williamson sold his Volkswagen, Mitsubishi and Kia franchises but held onto the Honda franchise. His old Honda service shop was on the property the city bought, but his Honda sales department was on the portion the city didn’t buy.

However, his auto franchise required the sales and service departments to be combined if he moved. So he moved the Honda sales and service departments to a slick new building at South 27th Street and Yankee Hill Road.

His body shop remained downtown at 2024 N St. on the property he expected the city to buy. But now, years later, the body shop is still downtown, struggling because people don’t seem to know it’s still there.

“I’d like to get them here (on South 27th) but can’t afford to do both,” he said.

Clint Thomas, a real estate agent for the Urban Development Department, said the city’s option to buy Williamson’s west property “expired for lack of funding.”

Thomas said the city had every intention of buying the rest of the property, but just couldn’t put it together.

“We don’t feel like we left him holding the bag,” he said. “I think that Jim had very high hopes. I think everybody involved going in was confident.”

Thomas said the city only needed about two-thirds of Williamson’s east property, which was in the way of the future Antelope Valley channel, but bought more than needed because the channel cut through at an angle and would have made the rest unusable.

Urban Development staffers hoped to be able to buy the rest of Williamson’s property, Thomas said, because when the Antelope Valley Project is done, the property will be prime for redevelopment.

“It was something that the city knew they could use in the future if they could put together a funding source to pay for it,” he said. “So that’s why we took the option in the hope we could put together the funding. We knew we were going to possibly need it.”

In an effort to buy the rest of Williamson’s property and other parcels for future redevelopment, in 2003 the city tried to create a public-private redevelopment corporation that would buy property around the Antelope Valley Project area. City officials had a series of meetings with business leaders to explore the idea, but it never panned out.

The city’s economic development coordinator, Darl Naumann, said investors were worried about how long the land would have to be held until it was no longer in the flood plain.

“It’s a tremendous investment for anybody,” Naumann said.

Williamson knows that well. He said those who have expressed interest in buying the property have said the carrying costs are just too high; that it will take too long for the land to get out of the flood plain.

The city still has right-of-first-refusal on the property, but Thomas said he doesn’t know where the money would come from to buy it. Williamson said litigation is possible “only if I feel like I’ve run out of all options.”

“I don’t want it to come to that,” he said. “I may be forced into that because of business conditions. I can’t let the body shop go forever.”

He believes the city is obligated to purchase the rest of his property by year’s end.

“I’m not happy,” he said. “I didn’t put myself in this situation.”

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