T-R PHOTO BY LANA BRADSTREAM The north parking lot, formerly for doctors, of the old hospital property in downtown Marshalltown will go up for auction at the Marshall County Sheriff’s Office foreclosure sale. The scheduled date is June 9.

The role of the Marshall County Sheriff’s Office (MCSO) in the downtown hospital property is not over yet. The former doctor’s parking lot north of the hospital is included in the sheriff’s foreclosure sales list with a scheduled auction date of June 9.

Sheriff Joel Phillips said the entire property is actually divided into four parcels, and the parking lot is one of them. The judgment amount listed in the “Notice of Sheriff’s Levy and Sale” is $1.8 million.

“It’s an expensive parking lot,” he said.

Originally, it was suggested that the four parcels be sold as one, but Phillips said that was not appropriate. He added this will be the first sale. Previously, the MCSO had the downtown hospital scheduled for an October 2025 foreclosure sale. That sale was postponed three times before being canceled in January.

Phillips is checking on the rules and regulations regarding foreclosure sales, as he was unsure if postponing three or more times was allowed. He was in Des Moines yesterday to get some more information on the matter.

“I have not found any case law for it yet, which is why I am at this conference to see if I can come up with a good process moving forward,” Phillips said. “Hopefully I can come up with an answer to what should occur with a potential sale.”

It does not look like the City of Marshalltown will be a bidder on the property. The city filed a 657A action against property owner CD Marshalltown to gain the title for the property and reached a settlement with. A.J.S. of Des Moines, Inc. d/b/a ServiceMaster by Rice, one of the lien holders.

Marshalltown City Administrator Carol Webb said the city’s approach to acquiring the property will remain through the settlement agreement, instead of bidding directly at the MCSO sale. She added the parking lot is not part of the city’s lawsuit, but it is addressed in the settlement agreement, because ServiceMaster has an interest in the parcel through a mechanic’s lien and judgment.

“The agreement states that ServiceMaster will bid at least $75,000 of its outstanding judgment at the sheriff’s sale,” she said. “If ServiceMaster obtains the title to the parking lot, and if the city obtains the title to the former hospital property, ServiceMaster would then transfer the parking lot to the city for $75,000.”

The agreement provides that, upon entry of judgment in the city’s lawsuit, the city obtaining the title and ServiceMaster obtaining the title to the parking lot, the parties would have 30 days to coordinate transfer of the parking lot to the city.

“Because those conditions have not yet all occurred, I do not have a specific completion date to provide at this time,” Webb said.

She added that the approach is intended to allow the city to assemble the former hospital property and related parking area in a more orderly way, but noted the agreement only becomes operative if the conditions in the agreement are met. The next steps depend on the court proceedings and the outcome of the sheriff’s sale for the parking lot.

Ultimately, the city’s goal is to address a long-vacant and deteriorating property that has created public safety, blight and redevelopment concerns for the downtown area. Webb said it is a complicated legal and property matter involving multiple parcels and interests, and the city is working through the available legal process to protect the community’s interests and position the site for a better long-term outcome.

Phillips is hoping for a quick and positive outcome, regardless.

“I know a lot of community members and businesses want to see resolution to this property,” Phillips said. “I hope resolution is quick, so we can move forward with progress and development, which is exciting. There’s a lot of potential.”

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Contact Lana Bradstream at 641-753-6611 ext. 210 or lbradstream@timesrepublican.com.