City forced to pay up to $400,000 to demolish unsafe building (updated)

City Council has tonight agreed to pay for a building demolition on Gore Street that could end up costing taxpayers up to $400,000.

149 Gore St. was declared dangerous in April.

The city has taken legal action against the owner, but the building deteriorated so much that officials decided it needed to be demolished immediately for safety and liability reasons.

"The building had a fire in it in the past," Freddie Pozzebon, the city's chief building official, told Monday's City Council meeting.

"We've been watching... we've boarded it a couple of times prior to putting in a property standards order for the roof that had a hole in it."

"The longer these buildings stay boarded with no heat, they continue to deteriorate. When you have breaches in the building, this accelerates the deterioration," Pozzebon said.

"The property owner did not comply during this time despite the city also pursuing legal action," says Larry Girardi, the city's deputy chief administrative officer for public works and engineering.

"This matter is currently before the court. In these situations, the city is left with no choice but to demolish the building for safety and liability reasons."

"The demolition of this property proved to be overly onerous. It was determined that both the roof and the floor had collapsed. The situation was further complicated by the fact that the building was physically attached to both the adjacent neighbouring buildings," Girardi said.

"A structural engineer was retained and it was determined that it was unsafe for anyone to enter. An environmental engineer was retained to determine the presence of any designated substances and this inspection also determined that the building was unsafe to enter."

To prevent unauthorized entry to the site, the building was barricaded.

"Only one contractor was willing to complete the work, and it was not possible to obtain a fixed price given the inability to access the building, and the unknown structural ties to adjacent structures," Girardi said in a report to Mayor Provenzano and councillors.

"The method of payment in this situation is to proceed on a time and materials basis with the contractor, under the daily supervision and administration of the engineer to confirm legitimacy of hours, equipment usage and materials. Preconstruction surveys were completed for both adjacent properties, and then the building was essentially disassembled utilizing telescoping man-lifts for access by contractor personnel under the direct supervision of a structural engineer to ensure the integrity of the adjacent buildings."

Bills submitted for the work so far total $183,000, but the final cost is expected to be considerably higher.

"Total cost, including all demolition and engineering costs, is anticipated to possibly reach $400,000 once all invoices are submitted, and final restoration of the exterior walls of the adjacent buildings is completed in the spring."

"The city has no budget for the demolition of private structures, and staff has not encountered a demolition of this cost and complexity in recent memory. The process allows for the placement of these costs plus a 15 per cent administration fee on the tax roll for the property," Girardi said.

"If the property is not sold for taxes, a decision will have to be made if it should be vested in the city’s name and either kept or sold. Currently we are also reviewing what other avenues may be available to the corporation to offset these costs."

"The eventual cost to the city in this case is unknown at this time. If there is a loss incurred, typically it will be absorbed in a year-end corporate surplus or the contingency reserve after every legal option against the property owner has been pursued."

The building came up for tax sale in 2014 and 2021 but no bids were received.

In tax sales, the minimum bid must cover whatever taxes are owed on the building.

The high cost of the demolition was discussed by councillors and city staff.

The incident will be reviewed and staff will consider adding a line to future city budgets for such situations.

"As far as following up on vacant buildings, the passage of the new vacant buildings bylaw gives us a lot of tools to address some of the concerns that this building has raised, in a much more timely fashion than we were able to before," said chief administrative officer Malcolm White.

"The legal department has added several steps to ensure we have greater oversight over the properties," White said.

Some property management duties have also been recently added to the city risk manager's job description.

"We are pursuing any and all pathways to be reimbursed for the costs associated with this building and its demolition," White said in response to a question from Ward 4 Coun. Rick Niro.

The recent hiring of an additional part-time bylaw enforcement officer allows the city to take a more proactive approach with derelict buildings, added property standards czar Pozzebon.

"With council approving that vacant building bylaw, it gave us that extra tool so that these buildings don't stay just boarded and just left like that."

"It puts the accountability back on the owner to take care of their vacant building and make sure it doesn't further deteriorate," Pozzebon said. 

Shelley Schell, chief financial officer and treasurer, said the tax sale process starts when tax payments on a property are three years in arrears.

In the fourth year, the city may register a tax arrears certificate.

A tax sale may take place during the fifth year.

"Between Year 4 and 5, the ratepayer has one year in which to pay in full the amount that's outstanding," Schell said.

Most of the cash spent by the city to clean up derelict properties is collected in advance of any tax sale.

"Gore Street is a bit on an anomaly on the amount that it was."

"We are looking at processes on how to deal with these types of properties."

"We've learned our lesson," said Ward 3 Coun. Matthew Shoemaker.

"I'm happy that this building has been taken down. It was a danger to our community."

"I wish it hadn't gotten to this point where it collapsed and became a security threat."

"It sounds like this was a worst-case scenario come true," Shoemaker remarked.

"On a going-forward basis, we should see an improvement," added Mayor Christian Provenzano.