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The banner hoisted before a boarded-up building in Anoka recently said it all: “Saving veterans’ lives while saving our history.”

That’s the ambitious plan to transform a cluster of century-old structures into veterans housing, the latest preservation effort amid a yearslong debate about what to do with the crumbling buildings. They sit on the grounds of the old Anoka State Hospital, known as the state’s first “asylum for the insane.”

The county owns the site and officials previously looked into tearing down the shuttered structures, known as cottages 2, 3 and 4, plus an auditorium. That’s an outcome one Anoka city leader has quipped that he would chain himself to the door to prevent.

Now officials are savoring a recently brokered lease deal between the city and county, marking an amicable end to an unusual dispute.

“This has been a long time coming,” Commissioner Scott Schulte said at a County Board meeting last week, when commissioners approved the lease agreement.

A similar plan fizzled last year. But Anoka officials say they’ve found the linchpin to make it work this time: Melony Butler.

She runs the nonprofit Eagle’s Healing Nest in Sauk Centre, Minn., which also houses veterans in renovated historic buildings. Butler said she can get the Anoka structures up and running for a fraction of earlier estimates that ran into the millions of dollars.

The plan is to turn the cottages into veterans housing for homeless or vulnerable men, women and families. All the work will depend on donations and volunteers. The clock is ticking, with the goal to get the first building open as early as Dec. 1.

“They need help now,” Butler said.

‘We’ve declared peace’

The nonprofit Commonbond Communities had also considered the site for veterans housing before crucial tax credits and funding fell through.

City officials, determined to preserve the buildings, then looked to lease them from the county, with the goal of subleasing the structures to another nonprofit willing to take them on.

And that’s when negotiations took an unexpected turn.

In August, Anoka city officials and staff said they were stumped by the “onerous” 47-page lease agreement drafted by the county. It was a lease that City Attorney Scott Baumgartner said “almost sets the city up to fail” and prompted Council Member Mark Freeburg to ask, “Does the county know they’ve insulted us?”

County officials say they were looking to protect the county and taxpayers from liability, especially given the structures’ deteriorating condition. County Administrator Jerry Soma characterized the dispute as a disagreement over “wording” — not over the use of the buildings.

Others take a more jaundiced view. Sen. Jim Abeler, R-Anoka, has called the back-and-forth over the lease “useless delay.” Abeler has been a key supporter and liaison in the effort to bring Eagle’s Healing Nest on board.

“If we don’t get men in there this winter, someone will die,” Abeler said. “This is a high-risk population.”

In recent weeks, the city and county settled on a lease that gives the city 10 years to develop the properties. Should they become certified for occupancy, the lease will extend for 25 years, with additional five-year renewals.

“We’ve declared peace — peace between the city and the county,” Abeler said. “The veterans will be served and the buildings will be saved.”

But the project has some worried about health risks.

“There is more mold in these cottages than there is paint on the wall,” Anoka County Commissioner Matt Look said. “I have a concern that these veterans who were put in harm’s way may be put in additional harm’s way using these facilities.”

Branches poke through the roof of one cottage, allowing water to seep in. Urban explorers and vandals have left behind broken windows and graffiti.

Butler, founder and director of Eagle’s Healing Nest, said the buildings are structurally sound and ripe for renewal — mold and all. She estimates the cottages can house 60 to 90 veterans when completed.

Project supporters are working to raise funds and recruit volunteers, including plumbers, roofers, masons and electricians. That effort got a boost Thursday at a kickoff rally at the historic riverfront property. More than 200 people attended, including veterans staying at Eagle’s Healing Nest in Sauk Centre, who spoke of the need for veterans housing.

Army veteran Elaine Reinholz said Butler’s facility helped her escape an abusive marriage and has allowed her to heal in the past two months.

“I have not once in 55 days thought about taking my own life,” she said. “I’m here today happy for the first time in years.”

Hannah Covington • 612-673-4751