The city of Quincy has few choices -- and none of them good -- when it comes to how to pay for the cleanup of the remains of the former Newcomb Hotel, which was demolished this month after a Sept. 6 fire.
The cleanup costs, estimated between $400,000 and $500,000, will likely have to come from money set aside from the downtown tax increment financing districts after it was discovered that the building's owner, Skokie developer Victor Horowitz, had no insurance on the property.
The city is requesting proposals for the cleanup to be submitted by Sept. 30.
Demolishing the Newcomb had been an option for the city before the fire. Attempts to revitalize the deteriorating property never materialized, as the hotel has shuttled between owners since the 1980s. When heavy storms in April caused significant damage to a three-story addition on the east side, it became clear the building had major problems. Despite the recent damage, however, most city officials believed that the demolition would not have to be done immediately.
To pay for the demolition cleanup, the city likely is going to have to use a portion of property tax dollars that are deposited into its tax increment financing fund. Money comes from properties within the two TIF districts in downtown Quincy.
TIF dollars are typically used for infrastructure and economic development projects within the districts, and the idea of using that money to pay for the cleanup is raising eyebrows with some folks in the downtown area. The issue will be addressed before the City Council Monday night.
There does not seem to be a better way, however, to pay for the cleanup.
The city maintains a cash reserve fund, but the City Council specifically wants that fund to be available to make payroll if the city has a financial emergency. The city has $1.226 million in its cash reserve fund, with the ultimate goal of raising it to $1.37 million to cover two payroll cycles.
Another option to pay for the cleanup would be to use available capital dollars that are used for infrastructure and equipment purchases. Aldermen won't likely approve dipping into that fund, either.
City officials don't want to raid the TIF fund, but it doesn't look like the city has a choice. The city's legal staff is examining all opportunities to recoup money from Horowitz, but the hope seems slim.
The city has been directing TIF funds in recent years to leverage grants for streetscape work and to rehab downtown parking lots. The money also has been used to help developments in the downtown, such as the $131,000 in infrastructure improvements around the Franklin Square Apartments on Maiden Lane.
Other recent projects where TIF money was used were $114,000 to complete a $1.1 million streetscape project around the Kroc Center and the Adams County Health Department, $280,000 to renovate Parking Lot I near the southeast corner of Sixth and Hampshire, and $337,000 for the construction of the municipal parking lot at Sixth and Jersey.
A Cedar Rapids, Iowa, developer had been entering negotiations with the city to reach an agreement to develop the building into market-rate apartments. The firm was likely to request TIF funds for the project, and the city's TIF fund now has a balance of about $500,000.
Instead of that money going toward development, it appears to be going toward cleanup -- and the balance essentially will be wiped out. Maybe the city will put any money it receives from the eventual sale of the property back into the fund.
It's not the ideal situation, but it has to be done.