The city is taking out a zero-interest $1,987,343 loan through the Urban and Rural Centers Unsafe Buildings Demolition Bond Act to demolish dozens of unsafe buildings.
Finance director Fabiana Mello said the loan does not require payment for the first two years. She said the city will pay off the loan over a 10-year period. The city will use $200,000 in federal grant money that’s used for demolitions to pay back the loan, said mayor Jose “Joey” Torres.
Council members and administration officials had spirited discussions on the borrowing measure that lasted 1 hour and 30 minutes on Tuesday night.
Some council members questioned borrowing money to demolish the properties. Michael Jackson, 1st Ward councilman, said the amount of money is “excessive” to demolish two dozen structures.
Torres’ staff provided the council with a list of properties the city wishes to demolish using the loan. Luis Velez, 5th Ward councilman, noticed 24 Pearl Street on the list. He searched the property on Google Maps and discovered it is a vacant lot.
“How are you going to demolish something that doesn’t exist?” asked Velez. Community Improvement director David Gilmore told Velez the list is a year old and the property was likely demolished in the interim because it was deemed an imminent hazard.
Gilmore said a final list will be produced once the borrowing measure is approved.
Velez also asked about the higher price to demolish a small property on Chestnut Street. Torres told him sometimes old homes have problems like asbestos that results in a contractor charging more to abate in demolition.
Some council members thought it would be prudent for the city to start a unit to demolish properties rather than contracting it out to companies.
“These types of demolition jobs we should be doing ourselves,” said Jackson. He said the city should be demolishing buildings using its public works department rather than hiring contractors.
Jackson said contractors take money out of the city. He suggested investing in public works to provide them the needed equipment to handle demolitions. Torres said he is working on doing just that.
The mayor said his plan is to use in-house staff to handle emergency demolitions. He said this would include homes ravaged by fire that require quick demolition.
One property, the former Leader Dye factory on Madison and 3rd Avenues, dominated the discussion. This building will cost $708,000 to demolish. Jackson said demolishing this property will not produce economic growth.
“There is no return on these dollars,” said Jackson. Council president William McKoy disagreed citing the Route 20 corridor. There is likely to be great returns on these properties once the buildings are demolished and development follows as has happened along McLean Boulevard, he said. He said the city had to demolish a number of old factories to create the Route 20 corridor, home to most of the city’s big box stores.
McKoy saw the massive property on Madison Avenue as a potential “engine for economic development.”
Jackson’s opposition to the borrowing measure also led the administration to argue these buildings are a danger to the community.
“The smoke stack is about to fall. That’s imminent hazard,” said Gilmore. “It’s leaning. It could fall and kill people.”
Alex Mendez, councilman at-large, who lives in the neighborhood where the factory is located, said that structure has been an eyesore for years. He said it presents grave risk for School 18 students walking to and from school.
“This is not about economic development. This is about protecting life, property, and limbs,” said Torres.
Torres and Jackson clashed over the measure. The council approved the measure in a 7-1 vote. Jackson voted against.
The borrowing is part of a $14.48 million debt the Torres administration is taking on for various projects. Kenneth Morris, councilman at-large, warned the city is diminishing its capacity to borrow money by continuously taking on debt.
Morris pointed to a measure to borrow money for workers compensation cases. He said these are re-occurring expenses that should not be funded through bonding.