Closing time at the Eastgate

It's been decided.

The Eastgate Hotel will be torn down.

The only question remaining now is who will do it.

If the City of Sault Ste. Marie and Algoma Insurance can come to an agreement on tipping fees for the rubble from the old hotel, then Algoma Insurance will pay the estimated $250,000 cost to tear down and dispose of the building.

The final bill could come in a little less than that, depending on how much the City agrees to shave off the tipping fees.

If Algoma Insurance and the City can't come to an agreement about fees to dump stuff from the demolition in the municipal landfill, then the City will tear down the Eastgate itself and sell the property as vacant land.

City Council decided last night to accept an offer from Algoma Insurance under which the City will get back $80,000 of the $113,700 of taxes unpaid on the property.

Algoma Insurance wants to tear down the building and it wants the City to waive or reduce the tipping fees charged at the landfill for all the debris from the property.

James Elliott, City commissioner of public works and transportation, recommended against the idea, saying the landfill wouldn't be able to accept certain types of refuse, especially steel and other recyclables.

Elliott said the city has waived the tipping fee for refuse that would be suitable to use as cover in the landfill, but wouldn't want to see anything else allowed in free of charge.

Details about how much the City could charge for tipping fees and what would be accepted at or even sent to the municipal landfill are open to negotiation with Algoma Insurance until October 15, said Lorie Bottos, City solicitor.

"At that time, if they [Algoma Insurance] are not satisfied with the progress of those negotiations, they could simply withdraw their offer and walk away," Bottos said. "We don't even know that they are planning to send this to the City landfill. They may be looking at other alternatives."

In recent weeks, there've been as many as three offers to purchase the old Eastgate Hotel at 874 Queen Street.

At its last meeting, Council decided to ask potential purchasers for a $75,000 bond to ensure they would be able to have the building in safe working order by August 31, 2011.

Councillors also stipulated that no more offers for the property would be accepted after August 23.

At 3 p.m. yesterday, a letter from one of the potential purchases, Steve Berto, indicated he was withdrawing his bid.

Little more than one hour later, an updated offer arrived from Walter Jakubsky offering to raise his bid from $25,000 to $40,000 with no conditions and no bonds.

His first offer had asked City Council to waive taxes on the property for a period of time, something that is not legal under the Ontario Municipal Act, said Bottos.

Jakubsky's plan had been to turn the hotel into low-income residential units.

Councillors decided that, because they didn't understand what was meant by the terms "no conditions," they would not consider the offer.

Ward 2 Councillor Susan Myers, a seconder on the motion to not accept bids after August 23, asked that this issue be reconsidered.

Myers explained that she missed a call from Algoma Insurance prior to the last City Council meeting that would have informed her of the company's intent to submit a bid.

"If I had known that, I wouldn't have supported the motion," she said.

The issue was revisited and councillors agreed last night to accept bids entered after August 23, making it possible for them to accept the bid from Algoma Insurance.