Now that the city finally appears close to selling its property at the busy 48th and O intersection, a mini-bidding war may be in the offing.

Other developers interested in the property say they’ll make offers, too.

The city bought land on the northeast corner several years ago while preparing to widen O Street.

City officials were criticized for paying what some — particularly City Councilman Jon Camp — thought was too much: $2.77 million for two parcels.

After the property was bought, O Street was widened, buildings on the parcels were razed and the property was offered up for sale.

But until this week, the land has sat idle.

On Monday, Urban Development Director David Landis said the city had received an offer from a local developer to buy the property for $1.34 million. The unnamed developer wants to bring a bank and national retailer to the corner, he said.

Lincoln developer Kent Thompson said he was surprised to hear that because he’s worked for more than a year with a national developer to redevelop most of the property on the east side of 48th Street from O Street to R Street into a retail center with upscale restaurants and stores.

He has options to buy several pieces of property from O to R, he said, but has been stymied by one private property owner.

He’d hoped the city would wait for him to work it out.

“I just thought that our deal was so much better that … they’d give us time to put it together,” Thompson said. “I think the citizens of Lincoln would prefer to have better quality shopping …  than another drugstore and a bank.”

In light of the recent offer, Thompson said he will make an offer, too.

Until now, one of the city’s conditions to a sale was a ban on access to the property from O Street because of safety concerns near the busy intersection. But the city has changed its stance on that, because the latest offer requires one entrance from O Street.

Thompson said his development doesn’t need an O Street entrance.

“The driving point here is that the mayor wants this corner off his back at any cost,” he said.

Mayor Chris Beutler said he is eager to return the property to the private sector, where it will generate tax revenue again.

“I hate to see it sitting there empty and unused, especially when we own it,” he said.

Another developer who has tried to buy the property is Mike Marsh of Realty Trust Group — which owned the corner parcel before the city bought it.

The city paid Realty Trust $923,000 for the corner where an abandoned Amoco station sat. Realty Trust also owns property due east of the city parcels, where it plans to bring a Staples in 2010.

The city sent out two requests for proposals from developers, and Marsh said his company was the only bidder both times. Realty Trust has offered to buy the property back for $1.2 million without O Street access, Marsh said.

When he put in a bid in late 2006, Marsh said, he planned a restaurant, a “small big-box” store and retail tenants anchored by a small park with a fountain.

“We tried and we tried and we’re continuing to try but you get to a point where you throw up your hands and things are out of (your) control,” he said.

Marsh said Realty Trust has now verbally offered $1.3 million without O Street access.

Urban Development Director Landis said Thompson and Marsh have talked generally about buying the property. But there are many other issues beyond price and access.

“What we haven’t gotten is, ‘This is what we expect the city to do and this is what we will do,’” Landis said. “If somebody wants to give us a proposal, bring it on. Tell us what it is. We’re open for business.”

Although the city initially envisioned a major development in the area, developers have been unable to assemble all the property necessary.

“It doesn’t seem to be a piece of land that’s easy developable,” Beutler said. “Nobody has been able to bring all of the parties together. This most recent proposition is one of the most appealing that we’ve heard so far. Everything else requires the city to exercise eminent domain or very significant TIF (tax increment financing).”

And Beutler’s take on TIF is very different from his predecessor, Coleen Seng’s: He believes it should be reserved for businesses that bring in new jobs or to eliminate blight, not for retail development that would happen either way.

“I’m reluctant to use TIF for retail unless there’s some other significant reason for using it,” he said.

As for whether a bank or pharmacy is the best use for the corner, Beutler said: “I’m not in the business of deciding which businesses go where. That’s for the private market to determine.”

Beutler said the city plans to move quickly on the offers it receives.

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