The Capital Improvement Board of Marion County has agreed to slash its sale price on downtown's Ober Building by $700,000 after inspections showed problems including a leaky roof and damaged HVAC system.

Board members agreed unanimously Monday to sell the building at 107 S. Pennsylvania St. for $3.1 million—an 18 percent discount from the original sale price of $3.8 million—to an affiliate of the Steak n Shake restaurant chain.

Steak n Shake, the lone bidder for the building, terminated its purchase agreement late last year after discovering problems during a 60-day due-diligence period, said CIB President Ann Lathrop.

"I'm excited to be able to keep a corporate headquarters downtown," Lathrop said during Monday's meeting.

The lower-priced sale requires approval of the Metropolitan Development Commission, which is scheduled to consider the deal Feb. 20. Closing is scheduled for Feb. 28.

Steak n Shake had agreed in August 2012 to pay $3.8 million for the six-story office building and spend another $2 million on improvements before moving its headquarters to the thrid through sixth floors.

Steak n Shake now has its local offices in the Century Building on the opposite corner of Pennsylvania and Maryland streets from the Ober Building.

Longtime Ober Building tenant Ratio Architects Inc., which occupies the first and second floors, plans to remain in the building.

The sale will return the building to public tax rolls for the first time in 13 years. The CIB acquired the property for $5.5 million in 1999.

The 1910 building is named for C.S. Ober, a local businessman who founded Business Furniture Corp. and Stationers Inc.