Preliminary price for tearing down old Reid: $7.7 million

There's a new preliminary price tag for the cost of tearing down the buildings that make up the former Reid Hospital campus.

Mayor Dave Snow told Richmond Common Council members during this week's meeting that the best guess for the cost of cleanup and demolition work at the site now sits at $7.7 million.

That figure was given as council members and the mayor discussed a proposed resolution that would authorize Snow to sign off on an application for a loan through the Indiana Brownfields Program.

Council eventually passed that resolution Monday night after amending it to include language that would cap any loan amount at $10 million. The original wording on the resolution didn't include an amount for the loan application.

The cost for remediation and demolition of the old Reid site remains in flux as TRC, the company hired to do a round of contamination surveys and other jobs related to the site, continues its work.

"What they have provided to us for the purposes of this application for this loan is what they can give us as their best ballpark figure right now, but we're going to drill down on that as we move forward," Snow told the Palladium-Item in an interview before the council meeting.

The contract with TRC calls for the company to prepare an application to the Indiana Brownfields Program's Revolving Loan Fund. In the contract, the amount mentioned related to the loan was $1 million, but that was before city officials learned that the old Reid site might actually qualify for much more.

"We were originally presented with the possibility of maybe a $1 million loan, which was interest free, that would see us through the remediation process," Snow told council.

"As we've been working through this ... the possibility they have brought to us in that meantime is the opportunity to apply for the entire project amount that would see us through completion."

The change in the scope of a potential loan came when officials realized that it might not be possible to first clean up hazardous materials at the site such as asbestos, lead and other concerns and then tear down the buildings.

"Because of the condition of the property, a lot of the waste is co-mingled because of the vandalism and what has happened there," City Controller Beth Fields told the Palladium-Item before the council meeting.

"It doesn't appear that the entire building can be completely remediated first and then demolished separately. Because of that co-mingling of the waste, it's going to require that they be done concurrently, which would then make it eligible for the (extra) funding."

Snow said it's important that the application be made now so state officials can evaluate it and determine if there's enough money available to fund the entire amount needed and whether the project would qualify for a zero-percent interest loan.

If approved for a loan by the state and if that loan then is approved by Richmond Common Council later this year, the city of Richmond would have a $385,000 annual loan payment to make for 20 years.

Snow's plan is for that money to come from the Richmond Redevelopment Commission, which is scheduled to take up the issue at its next meeting June 13.

Fields said the commission annually collects some $2 million in Tax Increment Financing (TIF) funds.

The redevelopment commission was chosen as the vehicle for the loan payments because the application process requires there be a dedicated repayment source for the loan.

Council was split on the final vote on the resolution, with the tally coming out 6-2 in favor of allowing the administration to proceed with the loan application. Misty Hollis and Jamie Lopeman voted against the measure, and Clay Miller was absent from the meeting.

Lopeman has been pushing for the city to explore potentially leasing its landfill rather than seeking a loan to come up with the money needed to clean up the old Reid site. He's leading a council committee dedicated to exploring that option.

"With this loan application, are we calling all other options off the table at this point? Are we going to stop the due diligence done for other options that are out there for funding?" Lopeman asked Snow on Monday.

"If other opportunities do arise as a repayment source, I'm thrilled to hear about them, but I do think it's really important to get this ball rolling," Snow responded.

Hollis said she was worried about the precedent being set by having council approve the issue through a resolution and not an ordinance, which would have required a public hearing during which community members could speak out either for or against the loan application.

City Attorney A.J. Sickmann explained that the time for an ordinance — and the resulting opportunity for public input — would come later should the state approve the loan application.

Hollis also asked Snow if his administration still planned on trying to get Wayne County government's help with the cost of the work that still needs to be done at old Reid. The county already is paying for half of the cost of TRC's $250,000 contract.

"For me and timeline I put in order here, coming to council first and then us working together as a team to make that ask I felt was most important," Snow said. "I fully think that a partnership should continue as we go through this process."

Snow also plans to seek other "community partners" to help share the project's final cost.

"I think it's very, very important that the city take the lead and get this ball rolling to get this moving, but I do not think that the city should be the sole bearer of the burden of this loan, so we will solicit outside sources to help us buy down this principle," Snow said.