GLADSTONE — The Gladstone City Commission has taken the first steps towards terminating a lease agreement that allows it to utilize a parcel of lakefront property adjacent to Van Cleve Park.

The parcel, which currently houses the fitness trail, sits right next to Kids Kingdom on Lake Shore Drive. The city has access to the property and maintains it as part of a trust agreement, whereby the city leases the property month-to-month for $1 a year and waives the parcel’s property taxes. Mayor Joe Thompson had requested discussion regarding the current state of the property at Monday’s meeting.

“Right now we are not in any position to buy property … and the whole time we are sitting on this, holding it in a tax-exempt state, and paying them $1,” Thompson said. “We have a lot of lake frontage in this town. I don’t think that we should be holding that property considering all the other lake frontage that we have.”

If the city were to add-on to the property, like a new recreational facility, they would have to get permission from the property owners to proceed with the addition. Even if permission were granted, the month-to-month nature of the lease keeps the city on edge, for the property owners could sell the parcel out from under the city at any time.

“I would consider it in a different light if we actually owned it,” Thompson said.

The parcel in question is considered residential, holding 463 feet of lakeshore frontage. After some of the commissioners noted how the property and fitness trail are hardly used by citizens, many believed the parcel would be well-suited for future housing development. Janice Ketcham, the city’s assessor, was asked to give an estimate on what the property would be worth. Ketcham noted that last year’s lakefront prices ran at $1,100 for every foot of lake front property. Using last year’s estimate, that would make the property worth over $500,000.

“The whole time we are sitting here, and people are looking for places to build houses, and we are holding [this property] captive,” Thompson said.

Commissioner Brad Mantela added to the discussion of future development on the parcel.

“What would be the future increase in tax revenue and potential of bringing families to the city if that was a buildable site,” Mantela asked the commission. “You could have multi-family units there in a very desirable spot.”

If the commission terminated the lease they would not own the property, which would re-establish property taxes on the parcel. Considering that the city entered this lease agreement in 1984, the property has sat tax-free since 1984.

While the commission made no decisions regarding the status of the lease agreement at Monday night’s meeting, a motion was made to consult with the Recreation Advisory Board about the facilities that currently exist on the parcel before taking further action. The lease agreement will be on the city commission’s agenda for its next regular meeting, which will be on at 6 p.m. on Aug. 8 at Gladstone City Hall.

Additionally, the commission decided to appoint Commissioner Robert Pontius to the Delta County Hannahville Collaborative Task Force Monday night. The purpose of the task force is to aid and promote economic opportunity and sustainability in the Upper Peninsula. Ron Miaso, who has been representing the city at these meetings, is retiring from the position when his contract expires at the end of July. Miaso encouraged the commission to fill his role.

Pontius has attended these meetings in the past, and will now be the sole advocate for the City of Gladstone when it comes to economic development in the local area.

“They are really valuable meetings … There is a lot of economic development going on in that group, and I eat that right up,” Pontius said on his appointment. “I want to thank Ron Miaso for his service … he is very well regarded and he has been great as the face of Gladstone at the [meetings].”

In other business, the commission reviewed and discussed the year-end financial reports, including revenue and expenses, which are currently pre-audited and subject to change. Robert Valentine of First Bank in Gladstone also presented a report on the current state of the city’s investment portfolio. The city began investing with Valentine in 2020.