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The cost for taxpayers to demolish a blighted, vacant hotel that officials call a major impediment to redeveloping the Southwyck area is increasing despite an initial promise that razing the building would cost the city nothing.
Legislation the Collins administration presented Friday to Toledo City Council could put the entire $842,000 demolition cost on the city.
Matt Sapara, economic and business development director for the city, told council earlier this year he anticipated getting the demolition money from the state through grants.
After $300,000 was earmarked last month in the 2014 capital improvements budget for the demolition, Mr. Sapara acknowledged the city had come up short and needed money that otherwise could have been used for street repaving to take down the building at 2340 S. Reynolds Rd.
The legislation, if approved by council, would authorize Mayor D. Michael Collins to increase the city’s liability to nearly $1 million.
In addition to the $300,000 from the capital improvement budget, the Collins administration wants to borrow $250,000 from the the Lucas County Land Bank; use $200,000 from JobsOhio, which could be either a loan or grant, and use $200,000 from the $1.3 million proceeds from the sale of 37 acres of city-owned land in Monclova Township.
Councilman Rob Ludeman, chairman of council’s economic development committee, said the future development of the site and area will “overshadow” the demolition cost.
“There are a number of economic development opportunities that I think are close to coming to fruition if that property is cleared, so it has to be one of the priorities of the city this year,” Mr. Ludeman said.
A patio-furniture retailer is interested in making a $3 million investment to open in the former Kmart store on Reynolds Road at Southwyck Boulevard, but only if the former Clarion is razed. Kmart’s closing was announced in November.
Joel Mazur, the mayor’s assistant chief of staff, could not say how much of the $200,000 the city is seeking from JobsOhio would be a loan.
“We left it open-ended at ‘up to $200,000’ because we are still working out the details of what they can contribute,” Mr. Mazur said. “There is a public health and safety issue associated with this property right now because there is evidence of people living in the building.”
Curtains can be seen blowing out of broken windows from the 11-story, 40-year-old building. Inside, debris and broken furniture are piled inside rooms where graffiti, holes, and peeling paint cover the walls.
Firefighters extinguished a fire set at the building Sunday.
Council President Paula Hicks-Hudson said the legislation would have to be “carefully” read.
“I think we have to look very carefully at this ordinance to determine what the city’s total financial liability will be, and I am sure there will be many questions,” Ms. Hicks-Hudson said.
The city does not have a signed loan agreement with the Lucas County Land Bank. David Mann, president of the Land Bank, said a loan would have to be repaid quickly.
“We would expect to be paid back in full in short order to make sure those funds can be invested in other neighborhood projects in the long term,” Mr. Mann said.
Council could review the proposal Tuesday at its agenda review meeting.
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.
Contact Ignazio Messina at: email@example.com, 419-724-6171, or on Twitter @IgnazioMessina.