ALPENA –One of the most-watched properties in Alpena is one step closer to being sold, officials said Tuesday.

If the chips fall as hoped, a large-scale, commercial and residential project could be erected at the former Alpena Power Co. site along the Thunder Bay River downtown.

Alpena Area Chamber of Commerce Economic Development Director Jim Klarich on Tuesday told the Alpena Municipal Council that Target Alpena, the economic development firm that owns the property, has signed a purchase agreement for the property with a local developer. Klarich said the development would include commercial businesses on the street level and high-end, luxury condominium units on the above floors.

A sale is far from final, but Klarich said the sale could close around Christmas if things go well.

The sale is pending the developer’s efforts to gather more information about the site, to test the local market for mixed-use developments, and to find possible tenants.

“It is more or less an option to purchase with a developer … we are still doing our due diligence, but it will all hopefully lead toward the desired end,” Klarich said. “There are hurdles in front of us and a few obstacles.”

Klarich said knowing who would operate businesses on the first floor in advance of an investment is also key to the developer.

“We would likely have to find multiple tenants in advance of the development,” he said. “At this point, it really is a math issue.”

Target Alpena, part of the Chamber, in 2015 acquired the property at the intersection of Water Street and 2nd Avenue, at the foot of the 2nd Avenue Bridge, as a donation from Alpena Power Co. A $245,000 Michigan Land Bank demolition grant was used to tear down the old office building. Alpena Power provided the $65,000 match needed to receive the grant.

The City of Alpena also sold Target a small, irregular-shaped piece of property behind the power company property to make it more symmetrical and appealing to investors.

Klarich said he would keep council briefed on the potential sale and development as the matter unfolds.

Steve Schulwitz can be reached at 989-358-5689 at sschulwitz@thealpenanews.com. Follow him on Twitter @ss_alpenanews.com.