CHAMPAIGN – The Urban League has signed an agreement to sell its downtown Champaign headquarters to developers Mike and Dan Hosier as soon as it can find a new, smaller location.

The agency, which has shrunk from 60 employees a few years ago to 14 now, no longer needs so much office space and wants to downsize.

The Hosiers, through their development corporation, R Rentals, essentially became the Urban League's banker, paying off the old mortgage, giving the Urban League a new loan and another $90,000 cash for its equity in the property, officials said. In all, the transaction totaled $374,500, said Mike Hosier, owner of Champaign Telephone Co.

That provided the Urban League with much-needed cash to pay off debt, said Sandra Jones, interim president and CEO of the Urban League.

In exchange, the Hosiers have a five-year option to buy the property and first right of refusal if the Urban League gets any other offers, Jones and Hosier said.

Eventually, the Hosiers plan to turn the two-story building into retail or office space on the first floor and possibly loft apartments above, Mike Hosier said.

The deal also included a 15,000-square-foot parking lot east of the building that has "pretty good exposure as well" for mixed-use office/retail space, Mike Hosier said.

But there are no concrete plans yet, as "we don't even know when we might get the building," he said.

If the Urban League is successful in its bid to take over the vacant Lone Star Lodge, which is now owned by the city, the move could take place quickly. If that bid is rejected, the league plans to stay where it is and open its new minority business development center there until it can find a new headquarters, Jones said.

R Rentals redeveloped a building across the street, at 307-311 N. Neil St., that houses Kirby Service and renovated second-floor loft apartments. Last year it redeveloped the Keller-Williams Realty building in the 800 block of South Neil Street.

"We really were just looking for another project," Mike Hosier said. "We knew the Urban League was going through some changes.

"We like Neil Street, the central part of town. That's a highly visible corner. We think the building is kind of underutilized, and we think it has some really good development possibilities."

R Rentals also owns the Wolfram Research building at Green and Randolph streets, an apartment building next door, the Champaign Telephone Building, and the East University Avenue buildings housing Habitat for Humanity and its ReStore.

"Mike is a terrific businessman. He's interested in downtown Champaign. He's committed to the Urban League, and he's been wonderful to work with," Jones said.

The Urban League, which ran into financial problems last year after it lost two major state grants worth 60 percent of its budget, has been cutting staff and closing programs ever since. In February it closed the Community Day Care center and recently decided to turn over several education programs to the Regional Office of Education in Rantoul.

It plans to sell the Community Day Care property at Bradley and Neil and several adjoining homes and lots along Neil Street.

If those sales go through, the Urban League will have eliminated all of its debt, aside from about $350,000 in disputed payments from the state energy grants, Jones said. That issue remains tied up in the state Court of Claims.