STERLING – The city accepted a proposal Friday from the Greater Sterling Development Corp. to fund first-phase environmental work at the Lawrence Brothers site.
The city's Industrial Development Commission adopted a resolution authorizing GSDC to set up a local revolving loan fund with $500,000 that has been released to the city from federal Community Development Assistance Program grant money.
The city received the grant in 1986, and because so much time has passed, it was notified last year that it could use the money to set up its own revolving loan fund for economic development purposes. The state no longer will serve as administrator, so the state and federal strings attached to the money will disappear.
Money borrowed from the fund is repaid with interest to make sure it is continually replenished.
GSDC Executive Director Heather Sotelo had presented the revolving loan proposal to the commission June 16, but it wasn't on the agenda so no action was taken.
Sotelo said $125,000 would be used for the initial environmental assessment work at the Lawrence industrial site. The plan also calls for using $75,000 as seed money for a special events/economic development fund. The remaining $300,000 would be earmarked for new revolving loans.
The city has been trying to find other funding sources to get work started at the riverfront eyesore after coming up empty on several attempts to get an assessment grant from the U.S. Environmental Protection Agency’s Brownfields program.
While $125,000 is just a small part of what it ultimately will cost to find and execute a solution at the site, the city can't even make a decision on redevelopment or demolition until the extent of the environmental contamination is determined.
"This money obviously won't do everything that needs to be done, but it puts us on the road and gets us going," Mayor Skip Lee said.
The city continues to pursue other options, Lee said. The sense of urgency is growing as other parts of the overall riverfront development plans are progressing.
"We''ll keep applying for grants, and we're still looking into private funding, but this provides the seed money to get the process going," he said.
Estimates for demolition came in at about $2.3 million, but that number dates back to 2011, Sotelo said. It also doesn't include any costs the city could be looking at for environmental remediation.
In the past, the city has put an estimated price tag of nearly $70 million on redeveloping the Lawrence and National-Stanley sites. The National-Stanley building will be turned over to the city when Stanley Blacker & Decker completes its environmental remediation work with the EPA. The city had been hopeful that could happen by year's end, but the timetable has been backed up.
When the city assumed control of the Lawrence building, some phase one studies, paid for by the company, had been done. The site assessment report was released in November 2010, but it didn't include in-depth inspections or sampling.
The cursory glance turned up seven major concerns that included a leaking underground storage tank, a hazardous waste storage area, a leaking transformer, and chemicals in various parts of the building.
A much more intensive second phase assessment would have focused on what might have soaked into the building or the ground, but because so much time has passed, the entire assessment process must be restarted.
Demolition and saving the mammoth 5-story building for other uses isn't necessarily an either-or proposition.
"It could wind up being a combination of both, and part of the building would be repurposed, and I think that's probably what will happen," Sotelo said.
In the city's original riverfront redevelopment plan, done in 2010, a hotel, banquet facility and condominiums were front runners for how to use the Lawrence site. The city is open to just about any uses, including office space or expanding the downtown residential component started with the Lawrence Lofts project.
"At the end of the day, it probably comes down to who shows up with their checkbook," Lee said.
City officials said the next step is to consult with the city attorney on the bidding process for the assessment work.
KEY POINTS IN PLAN
The plan for how the $500,000 in the revolving loan fund will be used under local administration:
• First-phase environmental assessment at the Lawrence Brothers building - $125,000
• Creation of a special events/economic development fund - $75,000
• Saved for new revolving loans – $300,000