Hey, you just found a Miele as well, didn't you? Good job rescuing these from the trash!
I think the tire size problem is easily fixed - they are the old English size 26 x 1 3/8 (E.A.3) tires not mountain bike tires. You need tires that say E.A.3, I.S.O 590, or 26 x 1 3/8 on them. Canadian Tire, Zellers or Walmart might have the tires you need, but most likely not a local bike shop. Last time I saw them at a Canadian Tire they were $10 each.
(read more here....
http://www.sheldonbrown.com/tire-sizing.html)
read more here about 3-speeds in general
http://www.sheldonbrown.com/english-3.html
Does the Alpine bike also use the ISO 590 tires?