The City Council agreed to give Decatur's historic L&N railroad depot new life Monday by approving a $2.5 million restoration.

Decatur plans to finance $1.5 million of the project's cost with a loan, with the remaining funding coming from a $720,000 federal transportation enhancement grant, $90,000 from the Decatur Downtown Redevelopment Authority and $200,000 to be raised in private donations. Downtown Redevelopment also will contribute $350,000 during seven years to help repay the loan.

The council approved proceeding with the project 4-1, with District 4 Councilman Charles Kirby voting no because of the cost. The measure was passed with a condition proposed by District 2 Councilman Roger Anders that the city pay no more to acquire the depot than its last appraised value of $145,000. The city had originally agreed to pay $175,000, an aspect of the project District 1 Councilman Billy Jackson said he could not support.

Community and Economic Development Director Wally Terry said he would talk to depot owner Wally Inscho about the new purchase price and report back to the council. Calls to Inscho were not returned Monday.

Council President Gary Hammon, the most ardent supporter of the renovation, said the city's annual debt service for the project should be a manageable $95,000 to $105,000, given current interest rates. Those payments could be covered by combining the $50,000 Downtown Redevelopment is willing to provide annually with $65,000 in annual savings the city could get by moving municipal personnel out of the City Annex building under lease on Cain Street Northeast, Hammon said.

The restoration includes using 4,000 square feet of the 6,000-square-foot brick building off Vine Street Northwest for police offices and the remaining space for a small transportation museum. A parking lot would be added, just a block away from Bank Street Northeast shops.

Hammon said he felt confident in the cost estimates provided by Huntsville firm Hoar Program Management, which the city hired to help assess the building.

"Hoar is historically within 3 percent of a project's total cost," Hammon said.

The council also agreed to extend its March 29 deadline to Nov. 15 to give Inscho an answer on the property. The extension moves the deadline to close the deal from April 30 to Dec. 31. Inscho has said he has spent more than $100,000 on repairs since he purchased it in 1983 for $22,500.

Officials see the depot restoration as a catalyst for more economic revitalization in downtown. The property would connect the historic business district on Bank Street to Northwest Decatur's historic neighborhoods across the railroad tracks.

Underwood and Associates, a Decatur architectural firm, would refurbish the clay roofing tiles, return the building's signature cupola and use as much of its original materials as possible.

The city will now have to start over its submission process with the Alabama Department of Transportation, Decatur grants administrator Allen Stover said.

Tiffeny Owens can be reached at 256-340-2440 or towens@decaturdaily.com.