Sarnia has agreed to give five local developers $5.4 million to raze, remediate and rebuild the derelict Sarnia General Hospital site.
In 9-0 vote on Monday, council cleared the way for GFIVE Inc. to demolish the crime-ridden building in the heart of Sarnia that has bedeviled neighbours and police the past six years.
The deal, subject to provincial approval, will see the company’s five principals — Charles Dally, Alex Jongsma, Mark Lumley, Kenn Poore and Marty Raaymakers – buy the land from the city for $1,000.
The city will then pay the developers $5.4 million, in stages, as the old hospital is removed and the site redeveloped into a mix of new housing and low-rise commercial buildings.
The community can expect to see construction fencing go up once the deal closes and all the approvals are in place, said Poore, a commercial real estate specialist.
“We’re happy to be doing the project,” he said. “Now it’s time to roll up our sleeves and get to work.”
The developers will be responsible for any unforeseen problems arising from the site remediation, which according to one estimate could top $8.8 million.
To finance the city’s investment, council voted 7-2 to take on new debt rather than raise property taxes and raid limited reserves.
The 10-year loan will reduce the annual impact on taxpayers, but it will also add an additional $900,000 to the city’s overall cost at current interest rates.
The new borrowing will reverse a defining trend for City Hall, which since 2003 has slashed the city’s total debt from $95 million to $12 million.
The move was vehemently opposed by Mayor Mike Bradley, who warned councillors that borrowing for new projects sets a dangerous precedent.
“Once you sip from this cup you will sip from it again and again,” he said.
The sale involves 7.5 acres in total, including the former hospital at 220 Mitton St. and adjacent nursing residence at 327 George St.
At a public meeting prior to the council vote, six of seven speakers said they supported the hospital sale, with many noting the developers are businessmen with a solid track record who live here and are invested in their community.
Poore said he was humbled by the community support.
“It was really heartening to hear people say that,” he said.
The boarded-up hospital has been stripped by metal thieves, damaged by military training exercises and is filled with so much loose asbestos emergency officials won’t enter it without hazmat suits.
Sarnia Police said in June that officers had been involved in 116 incidents at the old hospital building, with 24 arrests and 56 charges laid.
“Something needs to be done, and something needs to be done soon,” said Dr. Duncan MacKinlay, who told council the neighbourhood is now so unsafe he locks his office at 185 Mitton St. during the day to discourage thieves and drug cheats.
“It’s been almost seven years now and it’s getting ridiculous,” he said.
The same five investors entered into a legal agreement with the city in 2014 to purchase the land for $1,000 and redevelop it into a $15-million medical campus.
But council tabled a zoning application and that deal came unraveled the following March.