Feb. 17—A need for quick action to stabilize the fire-damaged Olivia Apartment building before further damage can occur is the reason city funds were requested for the project, the developer told the Joplin City Council on Tuesday night.
After a 50-minute discussion with multiple parties involved in the project, the council approved the deal by majority vote, though there was some concerns expressed about setting a precedent of city investment in such projects.
City Attorney Peter Edwards described the agreement as a private-public partnership that provides for $250,000 in dollar-for-dollar matching money for labor and material costs related to construction of the roof and other measures to secure the building. The agreement specifies the roof must be finished by June 15.
He also explained why city staff brought forward the agreement.
"The city is responsible for the health, the safety and welfare of its citizens," Edwards said. "Ultimately the fate of this building could fall on the city to demolish it, which we think would be in excess of $1 million, or at the very least if we repaired the building, by putting on a new roof, $250,000.
"We had a similar situation with the Howsmon building a few years back and had a big price tag to fix that building that had deteriorated. This is not a request that typically comes to the city, but that's a little bit of background on why we developed this proposal and took it to you for a vote."
The city had to spend approximately $600,000 to tear down one of two Howsmon buildings on Virginia Avenue when the building became unstable and saturated with water. The roof of a neighboring building had to be repaired to protect that building from deterioration.
Sawyer and Sullivan Smith are real estate developers who operate Blue Haven Homes, a subsidiary of their father's company, Bykota LLC, a real estate holding company. They renovate older homes that are then used as rentals.
Sawyer Smith said they have a renovation plan for the Olivia that will cost $6.5 million and will produce 38 market-rate apartments and possibly a restaurant on the top floor.
Engineers who have inspected the Olivia since the Dec. 7 fire that destroyed the roof have deemed it structurally sound, "but that won't last much longer in the condition it's in without that roof," Sawyer Smith said, especially with weather like Joplin has experienced this week.
Councilman Keenan Cortez asked if $250,000 would be the limit of the city's commitment to the project or if the city would become obligated to more payments. The city attorney said the agreement before the council commits a maximum of $250,000.
Councilman Phil Stinnett asked if the city has confirmed the current owner, Tillman Properties of Springfield, had no hazard insurance on the building. The city attorney said city officials are not aware of any insurance.
Stinnett asked if Lori Haun of the Downtown Joplin Alliance, which had helped bring about the deal to save the building, knew about insurance. Haun said that she was told by the owner that there was no insurance on the building and "that it's virtually impossible to get insurance on a building like that."
Stinnett said that insurance requirements are something the council and city staff need to discuss in the future before there are problems with other old buildings.
Because the Smiths' renovation plan involves the use of federal and state historic tax credits, Stinnett asked what happens if the city invests money and then the renovation stalls if tax credits are not obtained.
Smith said the lack of tax credits would not cancel the project but that they would have to find funding or investments elsewhere.
He said he realizes there has to be a wise investment decision made. He said that he and his brother have looked at well over 100 homes for the Blue Haven venture but settled on only 35 that made business sense.
"While there's plenty we want to do, we know we would be shooting ourselves in the foot if it is not going to work out financially in the end," Smith said.
Stinnett questioned why $250,000 is needed for a $6.5 million project.
Smith said it's because of the quick turnaround needed to roof the building. "We could pull that money (the city's) and try to find other means, but if you contribute, it's almost a guarantee for us" instead of having to delay the project to find that $250,000 investment elsewhere.
Historic renovation contractor and developer Jeff Neal also spoke about the need to firm up the deal so that work can proceed quickly to secure the building, and he explained how the tax credit process works.
The council voted 8-1 to approve the agreement for the city to provide the money. Stinnett cast the lone "no" vote.