LORAIN — A draft proposal of a deal that could keep St. Joseph Community Center operating calls for a good-sized portion of the former hospital to be torn down.
The tenants currently housed in the areas of the building targeted for demolition would be relocated to newer portions on the north side of the facility, according to those familiar with the proposal.
South Shore Community Development Corp., which owns St. Joe’s, has struggled for years to rein in mounting deficits and deal with physical problems plaguing the aging building. The nonprofit warned this summer that if a deal can’t be reached to bring in more operating revenue, it would shutter the facility.
In addition to running deficits of between $20,000 and $25,000 per month, South Shore also continues to owe the state about $1.3 million on a loan that was originally for $2.6 million. The state forgave half the loan in 2010 under a prior deal that was supposed to shore up the center’s finances.
Under the draft plan, the city and county, which each have guaranteed to pay off half of the remaining loan if St. Joe’s closes, would make payments totaling $850,000 toward the loan by the end of the year, according to emails between state and city officials detailing the proposal.
The state also would take half of the proceeds from the sale of the facility, according to the emails. After that happens, the state would release the mortgage it holds on the property.
The loan had been a key sticking point in a proposal the city made to the state earlier this year that called for the city and county to pay the state a combined $300,000 toward the loan. The state would have forgiven the balance of the loan under the terms of the deal, which the state rejected.
The rejected plan also called for the city and county to pump a total of $600,000 in operating money into the center over a three-year period.
Under the draft plan, the city and county would “provide up to $200,000 each in working capital to support transition during redevelopment plan,” according to the emails.
The city and county would equally share 20 percent of the proceeds from future building or land sales, the emails said.
Lorain Mayor Chase Ritenauer said he thinks the city would save money under the deal, but also keep an important part of the community intact. If St. Joe’s closes, he said, the city and county each would have to come up with $675,000 to pay off the loan they’ve guaranteed.
“That to me is a good investment because this issue has confounded the city of Lorain since before I could vote,” he said.
County Commissioner Ted Kalo said he believes the deal would be good for the county for the same reasons, even if the county does end up having to come up with $625,000 to cover loan repayments and operational expenses at St. Joe’s.
“Sometimes you write off your losses and salvage the facility at the same time,” he said.
Commissioner Tom Williams, who has been an outspoken skeptic of the push to save St. Joe’s, said he could get behind the proposal, although he wants the city to shoulder more of the financial burden than the county.
Unlike the county, he said, the city makes money off St. Joe’s by collecting income tax from those who work in the facility.
“We’ll go to $425,000, and I’m not going any more,” Williams said.
Demolition, asbestos abatement and other environmental issues are expected to cost more than $2.5 million. South Shore would pay for much of that with a $1.6 million Clean Ohio Revitalization Fund loan and roughly $350,000 committed to the project by Mercy Health Partners, Kalo said.
Up to $850,000 from the U.S. Environmental Protection Agency also would be used to fund demolition, according to the emails. The plan calls for 30 percent of the sale of property to be used to pay off loans associated with the demolition.
A key concern of officials about the new plan is whether a U.S. Department of Veterans Affairs clinic at St. Joe’s would have to be torn down.
Todd Roby, who owns Alpha Care, an adult day-care center at St. Joe’s, and who serves on the South Shore board, said he doesn’t think the VA will be impacted too severely by the demolition. And if it is, he said, the effects wouldn’t be until years from now.
But Kalo, Ritenauer and others said that the VA would be moved to north side of the building under the redevelopment plan. They said U.S. Sen. Sherrod Brown, who also has an office at St. Joe’s, has been discussing the issue with the VA.
The theory behind the demolitions, Ritenauer said, is to create a smaller, more manageable facility with a smaller footprint. St. Joe’s potentially could be sold off to a private developer once that happens, he said.
Doug Rangel, director of the Lorain Development Corp., wrote in an email that the demolitions would leave a 3.35-acre “development pad” at the northwest intersection of Broadway and West 21st Street.
He also wrote that there would be space in the remaining part of the hospital where the Valor Home, a transitional housing facility for veterans in need, could be built.
The veterans backing the Valor Home had intended to spend $300,000 to purchase space at St. Joe’s, although those plans have been put on hold because of the uncertainty surrounding the center’s future. According to the emails, 25 percent of the money from the Valor Home sale would go to the state while the remaining money will be used to pay down South Shore’s debt.
Contact Brad Dicken at 329-7147 or email@example.com.