Razing Clarion Hotel to cost city $300,000

5/23/2014

A plan Toledo City Council unanimously approved months ago to acquire and raze the vacant Clarion Hotel in southwest Toledo was supposed to be free for city taxpayers, but the city administration said Thursday demolition would actually cost the city $300,000.

The expense was buried within the proposed 2014 capital improvements budget. The capital improvements budget has been a source of consternation for councilmen Mike Craig and Lindsay Webb, who said street repaving dollars were unfairly allocated among the city’s six council districts.

Councilman Larry Sykes pressed Mayor D. Michael Collins’ administration during a Thursday committee meeting about the $300,000 request.

Matt Sapara, economic and business development director for the city, said he anticipated getting the entire $842,000 demolition cost from the state through grants.

“We came up short,” Mr. Sapara said. “We will not be able to bridge that without CIP dollars.”

TransCapital Bank of Florida took control of the former Clarion property through foreclosure in 2009 after its Miami Beach, Fla., owners, Toledo Hotel Investment Group LLC, defaulted on $2 million in loans. The building is now owned by the state and can be acquired by the city through the Lucas County Land Bank, Mr. Sapara said.

Councilman Matt Cherry, whose district includes the former hotel on Reynolds Road, said the blighted building is a major impediment to development where Southwyck Shopping Center once stood. A chain patio-furniture retailer is interested in making a $3 million investment to open in the nearby former Kmart store on Reynolds at Southwyck Boulevard, but only if the former Clarion is razed. Kmart’s closing was announced in November.

The $300,000 cost to the city was worth it, Mr. Cherry said.

That money would likely have otherwise gone to street repaving, City Finance Director George Sarantou said.

The city’s capital improvements budget totals $61.7 million, which includes $17 million for debt service, $14 million that will be transferred to the general fund for operating costs such as police and fire salaries, and $2.5 million for lease payments. Council could vote June 3 on authorizing more than $17.66 million of CIP money for the street work and several projects such as the construction of a new fire station in North Toledo. There is also $312,592 set aside for the “1 percent for the arts” program.

The street repair program alone will cost $12.2 million of city CIP money, but the city expects to get $23 million in state and federal matching grants for main roadways projects.

Also included in the expenses the Collins’ administration wants council to approve is $250,000 to fix the roof and the geothermal heating and cooling system at the city-owned Erie Street Market. Lucky’s Market, a Boulder, Colo., chain, is interested in opening a store in the building.

The proposed CIP budget also includes another $600,000 toward the construction of a new Fire Station No. 12 in North Toledo.

Contact Ignazio Messina at: imessina@theblade.com or 419-724-6171 or on Twitter @IgnazioMessina.