LYNDEN - Three years after a fire gutted Delft Square - leaving behind the burned remains of the 42,900-square-foot building - the city is proposing to bring it back to life as a hotel, public market and entertainment center with a rock climbing wall and movie theater.

That redevelopment idea, which could include ownership of the building and adding a third floor to it, will go before the City Council on Monday, July 18.

The council will be asked to allow the city to take a lead role through the following actions:

• Enter into a purchase and sale agreement with the current owner for all or part of the building. That sale would be contingent on finding development partners and funding sources, both public and private.

• Complete the cost estimates for a basic redevelopment of the building and a menu of options for the City Council and development partners.

• Create a request for proposals for the upper floors and basement from development partners.

• Initiate a more detailed design for the market area proposed for the ground floor.

Those recommendations were made by the city's Community Development Committee.

How much money the city would have to contribute to the effort - at a time when budgets are tight - is yet to be determined.

"At the same time if we don't spend money to make things happen, then nothing's going to happen," said Amy Harksell, planning director for the city of Lynden.

HISTORY

Located on the corner of Fifth and Front streets, Delft Square was occupied by several small businesses when two teenagers smoking marijuana caused a fire that heavily damaged the building in June 2008.

For longtime Lynden residents, the iconic building in the downtown was likely best known as the home to the Lynden Department Store before it closed in 1979.

Developer Jeff Johnson and his wife, Suzanne, bought the empty husk of the building for $210,000 in November 2008.

The Lynden resident then partnered with Jeff McClure, an architect with RMC Architects, and Pete Dawson, the owner of Dawson Construction, to pursue an ambitious redevelopment project with the goal of restoring the building to its original, 1920s-era state.

Johnson and his partners applied to have the building, which dates to 1914, listed on the historic registry.

Initial proposals for a mix of retail and office space on the first floor with apartments on the second floor haven't materialized. And an agreement with Bellingham Whatcom Housing Authority to develop apartments also fell through and was terminated in late 2010.

The recession and lenders' tightening of private capital have made redevelopment plans a challenge.

"We are still motivated to move forward with our concept, but we are reluctant to start until we have a better feeling about the ability to rent up the commercial component of the project," Johnson said. "If we had a firm deal with a qualified tenant for the ground floor we would be much more bullish on getting started."

As for the city's vision for the building: "We have been cooperative and we have expressed a willingness to review an offer if they decide to make one," Johnson said. "We have not gotten an offer yet so it is hard to comment beyond this."

FUTURE

Lynden's leaders view the redevelopment of Delft Square as a key component of revitalizing downtown.

"Right now, we've got a major building empty in downtown Lynden," Mayor Scott Korthuis said.

And that affects the small downtown.

"It has a tremendous negative impact - not only on the ability to draw additional retail but also psychologically on other merchants in the area and the community," said Gary Vis, executive director of the Lynden Chamber of Commerce.

Vis is among members of a committee gathered by the mayor to give the downtown a shot in the arm and to make the area the center of the community once more.

In addition to Delft Square, the renovation of the old city hall at Third and Front streets, as well as the Dutch Village Mall, are considered essential to revitalizing the downtown.

Work started on the renovation of the old city hall this month along with the adjacent 1912 Steinhauer building, both of which will become the new $2 million Jansen Art Center.

The Eleanor and Henry Jansen Foundation is paying the entire cost for the art center. Foundation representatives said the goal is to provide a place for the community to appreciate the arts, for artists to create and teach, and for kids of all ages to explore their creativity.

To strengthen the downtown, the mayor's committee identified the following ideas:

• Create recreation opportunities for multiple age groups, especially those ages 10 to 16 years old.

• Increase options for dining out.

• Create places for visitors to stay.

• Connect to the community's agricultural roots.

The city's proposal for Delft Square follows those ideas. They include:

• A rock-climbing wall surrounding an elevator shaft, a movie theater, a small bowling alley and a youth lounge. Other ideas have included an arcade, laser tag, indoor playground and a construction Lego area.

• Adding a third floor to make it more attractive for private business to develop a hotel. A minimum of 40 rooms would be needed to make it financially feasible, according to the proposal going before the City Council.

• A public market on the main floor, where people could buy locally made and produced food - such as cheese or bread - and artwork. Anchor tenants would be sought, as well as those who wanted to set up kiosks.

• A restaurant.

• A way for people to learn more about the community's agricultural industry, perhaps via large screens showing cows on the farm or cheese being made.

An analysis provided by the Center for Economic Vitality at Western Washington University seemed to indicate some demand for the project.

For example, spending by residents living within five miles showed that they spent $14,475 on games; $4.5 million in admission to the movies, theater, opera or ballet; and $22.8 million dining out.

Those dollars increase exponentially when the circle is widened to 10 miles, then 30 miles.

Given that 28 percent of Lynden's population is 19 years old and younger, the city feels that it can capture a portion of this revenue.

As for places for visitors to stay overnight, the city said it's needed. Visitors who come for weddings, rodeos, the fair, business meetings or baseball tournaments often find accommodations outside Lynden.

"We're very excited about what we've got so far," Korthuis said, describing the idea "as a great vision."

If the City Council gives the go-ahead on Monday, the next step is to figure out how to make it work - and how to pay for the renovation of what could be a 54,000-square-foot building.

"We have to financially make it work," the mayor said. "By that, I mean it has to be economically viable."

IF YOU GO

What: City Council meeting.

When: 7 p.m. Monday, July 18.

Where: Lynden City Hall Annex, 205 4th St.

PROJECT INFORMATION

Click on these links:

• Report on the ideas for the Delft Square project (PDF).

• Proposal before the Lynden City Council for the Delft Square project (PDF).