The Chelsea City Council unanimously approved a purchase offer of $175,000 for its Buchanan Street property from a sister company of Chelsea Milling Company Tuesday night.

The city purchased the 4.38 acre property and the building that housed Bookcrafter’s, a book printing company at 140 Buchanan St. in 2002 for $995,000, and the original plan was to put city offices on the site but that never materialized, and the property languished.

“There’s been a whole lot of inactivity on this property,” said City Manager John Hanifan, who was hired after the city purchased the property.

The city still owes $690,000 on the bonds, but has an escrow account of about $200,000, which was originally set aside from the bond proceeds to be used for the potential demolition of the building.

“Frankly, that property, well, let’s just say we were not very good at the real estate business,” Hanifan said.

The city issued a request for proposals for the property about 18 months ago, and when there were no takers, it was advertised for sale. There was one offer from Hayes Sumner LLC, a sister company of Chelsea Milling Company, which is located nearby.

When asked what the company would do with the property, Howdy Holmes, president and CEO of Chelsea Milling, said he’s not sure yet, “but it will be something good.”

Although there was discussion about selling the building and property at a loss, Hanifan said that if the conditions were met and the sale went through, it would mean about $15,000-$30,000 annually back on the tax rolls.

The city retained the right to keep all utility and stormwater easements and the purchase offer also needs to be reviewed by legal council.

Lisa Allmendinger is a regional reporter for AnnArbor.com. She can be reached at lisaallmendinger@annarbor.com. For more Chelsea stories, visit our Chelsea page.