Magnolia Vacation Rentals entered a contract Wednesday to buy the downtown Waco Grand Karem Shrine building from McLennan County.

County commissioners approved a $1.1 million deal with Magnolia Vacation Rentals LLC, which could be finalized in the next few months. Magnolia has the option to terminate the contract for any reason within 60 days. Otherwise, the county is now facing a countdown to find new offices for its employees who work in the building.

Magnolia spokesman John Marsicano said any news or updates about upcoming projects will be announced “via our official social channels,” and declined to answer questions about potential uses of the building.

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Grand Karem Shrine building

Magnolia Vacation Rentals has a contract to buy the Grand Karem Shrine building, built in 1928.

The property and an adjacent parking lot had been listed at $2.29 million on LoopNet, a commercial real estate site.

The 90-year-old building at 701 Washington Ave., and the parking lot, were on the market less than a month with commercial real estate broker Jim Peevey at Reid Peevey Real Estate Co. Commissioners hired Peevey on May 15 to market the building after a failed attempt to attract buyers through a bid process.

Peevey said he personally showed the location to 13 groups. Groups from across the state and outside Texas expressed interest in the property, and there were three competitive bids for the location, he said.

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Grand Karem Shrine building

The Grand Karem Shrine building in downtown includes a Moorish-style arch over its entryway.

Featuring a Moorish-style arched entry and ballroom large enough for hundreds, the building’s architecture remains largely unchanged since it opened in 1928. Its entry foyer still has decorative symbols of Freemasons and Shriners, including scimitars, double eagles and the Masonic compass and square.

The county bought the structure for $383,000 in August 1995, after the Karem Shrine relocated to a new headquarters off North River Crossing.

Precinct 3 Commissioner Will Jones said he is happy with the sale of the property and the concept Magnolia proposed for the location. Jones would not disclose those plans.

“It will bring attention and development to that part of Washington and puts it back on the tax rolls,” he said.

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Grand Karem Shrine building

The view from the Grand Karem Shrine building the county is set to sell to Magnolia Vacation Rentals LLC includes the McLennan County Courthouse and the ALICO Building, plus a county garage that is also for sale.

The contract includes a yearlong lease-back agreement that allows the county to continue using a portion of the building while it secures replacement office space, Peevey said. The county health services department and the child support court are the only offices in the 53,000-square-foot building. County officials have said less than a third of the building is in use.

Options for relocating the county health services department and the child support court could involve buying an existing building or building new, Jones said. The county owns land behind the Shepherd Mullins Visitation Center at the jail on Highway 6, which could be an option for a new building, he said.

County commissioners have been eager to return the Grand Karem Shrine building to the tax rolls after attempts to make better use of the space fell through. In 2016, county and city of Waco leaders considered a joint-use project for the mostly empty three-story building, but high renovation estimates derailed the idea in its early stages.

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Grand Karem Shrine building

City and county officials tour the ballroom on the top floor of the Grand Karem Shrine building at 701 Washington Ave. when they were considering a joint-use agreement for the mostly vacant county-owned space. The idea fell through because of high renovation estimates for the proposed uses, and the county entered a contract Wednesday to sell the building.

Commissioners also learned in August 2017 that the Grand Karem Shrine building’s roof was leaking, allowing water into the ballroom, and that repairs could cost $119,000.

Also during the meeting Wednesday, commissioners agreed to hire Peevey to market a county garage across the street from the Grand Karem Shrine building. The property at 623 Washington Ave. is another location county leaders have long discussed putting back on the tax rolls, and relocating services there to a better-suited location.

County Judge Scott Felton said Magnolia Vacation Rentals expressed interest in the location, so they agreed to put the property up for sale.

County Audtor Stan Chambers said money from the building’s sale would be placed in the county’s permanent improvement fund, but commissioners could choose to move it to the general fund.

Cassie L. Smith has covered county government for the Tribune-Herald since June 2014. She previously worked as a reporter for the Beaumont Enterprise and The Eagle in Bryan-College Station. Smith graduated from the University of Texas at Arlington.