A dilapidated building in downtown Hartley will remain standing for at least another year.

Officials at City Hall this week learned that Hartley's application for a Derelict Building Grant to tear down the old Capitol Theatre was denied by the Iowa Department of Natural Resources. The DNR last year approved a $25,000 grant to remove asbestos and other hazardous material from the building, which had council members optimistic more funds would be allocated for its complete removal.

City Administrator Roxann Swanson applied for $75,000 in funding, the maximum amount allowed by the DNR.

"I was just hopeful that since we got the asbestos abatement grant and they've been here so much that we'd get it, but we did not," she said, noting the DNR claimed Hartley's application was missing certain requirements. "Some of the items on the list are in my application packet. I don't know if they missed it or if there was an issue with the submission of the grant."

The city was required to obtain three fresh demolition bids for the grant application. Swanson said the lowest was around $110,000 and the highest was $185,000.

The council has already allocated funds for the theatre demolition in next year's budget, which takes effect July 1, 2024. Swanson suggested the city should still use the money to remove the garage in the back of the theatre and the facade of the former Create-A-Craft building. It was left standing when the rest of the building was removed last fall in an effort to avoid creating a hole in the downtown district.

"There might be a few things we can do within the budget to start cleaning up things there, because that garage is going to have to come out before they tear it down anyway," she said. "It's all interconnected there."

Additionally, Swanson said the city could use the budgeted money to tear down the former Real Reflections salon on the east side of Central Avenue. Issues with the building's north wall were discovered last fall when the city removed the former Create-A-Craft building next door.

Moisture had penetrated between both structures and went unnoticed for decades, leading to decay of the salon's wall. The issue forced owner Tricia Elgersma to move her operations across the street to Salon West shortly after Create-A-Craft was torn down.

According to online property records, the Hartley Economic Development Corporation bought Elgersma's building for $20,000 and passed the deed over to the city at no cost. Elgersma later bought the Salon West building from Teri Fredricks and Lanette Pearson, and is now operating her business out of that location fulltime.

The council was open to using the budgeted funds for demolition of the other properties this year and re-applying for the Derelict Building Grant next year. According to Swanson, it typically takes two or three application cycles before a grant is awarded to a municipality.

Swanson also suggested the city use the extra time to thoroughly inspect the walls between the theatre and the building directly north of it, which used to house Steve's Bar & Grill.

"Every bid that came in came with a disclaimer that anyone that removes that building is not going to take responsibility for damage that occurs to the next one," she said.

The city has owned the old theatre since October of 2020 after acquiring it from Dwight and Darla Jacobs, of Spirit Lake. The arrangement ended months of legal wrangling, which began in 2019 after the council declared the dilapidated former theater a dangerous building on the advice of O'Brien County Environmental Health Specialist Jonathon Hintz.

With no options for restoration, the council decided a date with the wrecking ball was the city's only option. The theater was built in 1925 and has a deteriorated roof, extensive interior water damage and severe mold issues.

Crews removed asbestos and other hazardous material last summer. The $25,000 Derelict Building Grant Hartley received to help pay for the abatement job took two application cycles.