"We think there's a pent-up demand for housing downtown, and we think this would be a good place to put it," Leatherman said.
In a unanimous vote Monday, the city Redevelopment Commission authorized the city to seek appraisals on the properties. Once the appraisals are finished, possibly by late February, the panel could vote to buy the properties.
As early as March, the city could issue a request for proposals from potential project developers, said Leatherman, adding that city officials have already heard from several developers who may want to build on the property.
Ideas have included brownstone-style row houses, Leatherman said.
In 2011, the city bought several properties along Ewing, just south of Jefferson Boulevard and north of Brackenridge Street. The proposed $1.8 million purchase would give the city ownership of the entire block, except for a gas station and auto body shop on Jefferson and a rental house on Brackenridge.
The Redevelopment Commission would pay for the property with money from the Jefferson Pointe tax-increment financing district. Taxes generated in a TIF district usually go into a fund that can be used for special projects.
However, since the properties on Fairfield and Ewing sit adjacent to, not inside, the Jefferson Pointe TIF district, any new tax revenue generated by development on the land would go to schools, the city's general fund and other normal taxing units, Leatherman said.
Commission member Casey Cox described himself as a "big supporter of downtown living" but questioned why the city needs to spend money to attract developers if the property is so desirable.
"Critics would say we built Harrison Square to be a catalyst to private sector development," Cox said. "Why hasn't a private-sector company acquired these properties?"
Panel member Karl Bandemer said developers need incentives to build downtown because real estate there is much more expensive than in the suburbs, where land is available for as little as $35,000 an acre.
Although the city will spend money on the land, the developers that have approached city officials have not asked for any other subsidies, Leatherman said. And in the long run, the increased property tax revenue from a new development would make up the difference, he said.
As an example, Leatherman pointed to the site of the Courtyard by Marriott hotel at Harrison square, which generated only $5,800 in annual tax revenue as an empty lot and in a few years will generate $400,000 annually.
The entire chunk of real estate between Fairfield and Ewing generates about $14,000 in tax revenue each year, Leatherman said.