REED CITY — The Osceola Inn was declared a “public nuisance” by Reed City Council members at Monday’s meeting, which moves the potential demolition of the building one step forward.

Osceola Inn owner Scott Flaska and General Mills have been in negotiations for months, according to Reed City Manager Ron Howell. In December 2012, the city applied for and received a blight elimination grant from the state, and the state set a deadline for the grant funds.

Demolition of the Osceola Inn is estimated at $375,000. The grant covers nearly all of it, Howell said. In addition, the city has used money from its Brownfield Development Fund to help pay for the building and environmental evaluations, which have been completed.

In order to move the grant process forward, the city had to approve a declaration resolution that the building was a nuisance.

Howell said he has been told Flaska and General Mills reached a purchase agreement and are waiting for the deal to close, which could take until November. Upon closing, General Mills will solicit bids for demolition of the structure.

If Yoplait does not purchase the building, the city would have to give up the grant, start over again and approach Flaska about what can be done, Howell added.

In other business, council members approved a motion to place the task of building a new city website out for bids. It had been recommended to allow Chickering Associates, Inc., of Rockford, to develop a page for the city’s contribution of $2,375, which is half of the total cost. The other half would be paid for by the Reed City Chamber of Commerce.

However, council member Roger Minert said he believed the cost is too high and believes the hosting fee should be included in the total cost.

Council member David Bisbee agreed with Minert and made a motion for the city and chamber to solicit bids for building a new website. The motion was approved by the council with no opposition.