After finding a solution to a contractor lien against the property owner, the Wrangell Borough this week completed a $2.5 million purchase to take over ownership of the former sawmill property six miles south of downtown.

“The intent is not to hold on to the property,” Mayor Steve Prysunka said at the June 14 assembly meeting. The purpose in buying the 39 acres is to guard against the seller further piecing out the land in small parcels that could hinder future large-scale development. “Site control of this area has been really important,” he said.

The owner has been “chunking it out over the years,” the Mayor said in April, noting that the remaining acreage “is still the most industrial piece” of the property.

It’s one of the last deep-water port development sites in Southeast, Prysunka said at last week’s assembly meeting. The plan is to ensure the property is used “in a way that brings economic benefit to the community.” He added, “This will help secure our future.”

The assembly voted without opposition to buy the property.

The owner, Betty Buhler, had been asking $2.7 million for the entire 39 acres, but also was willing to further carve it up into smaller parcels for buyers. The property measured about 110 acres when the borough looked at possible development six years ago. Buhler and her late husband, Richard Buhler, operated the Silver Bay Logging sawmill until it closed in 2008.

Closing had been delayed on the borough purchase until the seller, a contractor who did work for the seller and the borough could settle on a way to deal with the contractor lien. Under the deal, $701,654 of the sale proceeds — the amount of the lien — will be held in trust until the seller and contractor can resolve their dispute.

“We will get the title,” Prysunka said at the June 14 assembly meeting. “We won’t have any involvement in that at all,” he said of the lien and funds held in trust.

William “Shorty” Tonsgard Jr., owner of Channel Construction, a scrap metal collection company that serves Wrangell and other Southeast communities, filed the lien in March against a company owned by Buhler, claiming he is owed money for work taking apart and scrapping a barge at the mill property.

The lien will be resolved between the two parties after the borough closes on the purchase, Borough Manager Jeff Good told the assembly. The sale was scheduled to close this week.

The borough will pay for the purchase by drawing $1.2 million from general fund reserves and $1.3 million from its Economic Recovery Fund, Finance Director Mason Villarma said Monday. The fund holds federal dollars granted to Wrangell in the late 1990s to help the community recover from the fall in the timber industry.

The assembly did not set a timeline for selling or leasing the property. The plan is to reach out to private parties that have in the past expressed interest in the location, Good said the day after the assembly meeting.

Borough officials declined to identify the parties.

The borough would prefer that a single developer take over the site, Good said, though subdividing the land for multiple users is a possibility.

Whether the borough sells or leases the property is up for discussion, Good said.