CityofKetchikanThe City of Ketchikan and a seasonal-business owner have reached a tentative settlement in a lawsuit the city filed last year to recover the cost of demolishing a Water Street building damaged in a fire in fall of 2011.

The Alaska Duty Free building was alongside the downtown tunnel. After the fire, the city asked the owner to take care of the damaged structure. When the owners, Villa Machini, Inc., took no action for a year, the city in September of 2012 hired a local contractor to demolish it.

In 2014, the City of Ketchikan started the process of recovering the approximately $125,000 cost, which included asbestos removal. Last year, the city filed a lawsuit in Ketchikan District Court seeking to foreclose on its lien against the property.

Now, the tentative settlement, which still needs approval by the Ketchikan City Council, would allow the city to sell the property to recover its costs.

According to the agreement, the City of Ketchikan can bid on the property, which currently has a small restaurant leasing the site. If the city buys the site, the lease would transfer to the city.

If the sale price exceeds the amount owed to the city, Villa Machini, Inc., would receive those excess funds.

The settlement is in front of the City Council during its regular Thursday meeting, which starts at 7 p.m. in City Council chambers.