A panel has recommended that the Grand Central Building, a centerpiece of the Artists Village proposed for downtown, be purchased and renovated by the city.
"It's like building a wall brick by brick," Susan Jones Helper, the downtown project manager, said of the proposed village.
Under the plan endorsed by the Redevelopment and Housing Commission on Tuesday, the city would lease the building to Cal State Fullerton, which would operate a gift shop, art gallery, dance theater and restaurant in it.
The city would buy the building in the 200 block of North Broadway for $1.34 million and spend as much as $2.5 million to remodel it, with the project to be completed by July 1, 1997.
The city also would pay as much as $257,000 in subsidies during the building's first four years of operation. Cal State Fullerton would lease the building for $1 a year for 10 years.
In return for its investment, the city would gain sales tax revenue, although officials could not project this week exactly how much.
"We didn't do this for a financial investment," Helper said. "But with Cal State Fullerton there, that will help anchor the whole Artists Village."
The Artists Village is planned for a nine-block area bounded by Birch, Bush, 1st and 4th streets.
The second floor of the Grand Central Building would house as many as 45 students and faculty members from the university's art department. The basement would contain classrooms.
The commission's recommendation now goes to the city's Redevelopment Agency. The City Council, which doubles as the Redevelopment Agency, will consider the matter June 19, Helper said.