REED CITY — Downtown Reed City is changing. Demolition of the historic Osceola Inn has begun is expected to continue through the week.

The building dates back to the late 1800s and has been a topic of discussion for a couple of years between its former owner, the city and Yoplait — a General Mills company.

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 costs are expected to be about $327,000, but the funds from the grant helped reduce the cost to about $312,000.

Last summer, the public was invited to place bids on rooms filled with unique objects and items inside the building, including kitchen items, furniture and decor, or walk through the halls one final time.

Yoplait and Osceola Inn owner Scott Flaska have been negotiating on the sale of the property for months, and closed on a deal in November, according to Reed City Manager Ron Howell. Though Yoplait’s plans for the space remain unknown, Howell said it may be used for an additional business parking lot.

On Friday, demolition already had taken place to separate the inn with the connecting business, D&E Supply Company. Co-owner Doug Williams has been monitoring the progress since it began and said further demolition near the business will include spraying water on the site to keep dust from scattering.

"They're taking six feet off all the way back, so when they pull it off it won't pull my building down," Williams said. "The floor joists and the rafters go into my wall, so they had to cut that stuff off with chain saws."

He does not believe the demolition will have an affect on his business itself, but noted the closing of the Osceola Inn took more of a social toll.

"We used to eat breakfast there and drink coffee, eat lunch there, after work go in an have a beer and talk to people," Williams added. "If anyone was coming home to Reed City, they'd go to the Osceola Inn because they knew they would see their friends there."