BURA will put a former hostel building up for sale

BURA had budgeted up to $2 million to make critical repairs to the roof and framing, as well as the plumbing and electrical systems of the building at 664 Washington St., which adjoins the rear of the building. the inn at 667 Main. This work was deemed essential to prevent further deterioration, or even collapse, and had already forced the temporary closure of the inn.

However, the lowest bid the agency received was $2.3 million, not including the $70,000 already spent on remediation and immediate repairs. That would put the agency at a deficit on the project, officials said. And the cost could increase if other problems are discovered after work begins.

The BURA board of directors therefore decided to put the buildings up for sale, although officials are still trying to see if they can reduce the scope of the work to lower the offers.

“We need to explore all options and all potential buyers,” said Brendan Mehaffy, the city’s economic development commissioner and BURA president.

BURA’s decision represents a potential setback in the years-long saga over the future of the Inn and its prominent Theater District building, which BURA has sought to get rid of for years, citing its potential for commercial redevelopment, retail and residential.

The Main Street building has been home to the hostel since it opened in 1996, accommodating up to 50 people per night in large rooms with bunk beds, as well as the shared kitchen, dining room and living room. According to the nonprofit organization, between 5,000 and 7,000 guests visit each year. And its loyal supporters fought hard to save and maintain it, resulting in a Designated Developer Agreement that was extended twice before it expired on October 1, 2022.

The city agency will still negotiate with a group representing the inn, which has a right of first refusal to buy the building under an agreement with BURA starting in November. But officials insist any negotiations or contracts should result in a sale within a few months, with a demonstrated ability to complete the immediate work by the end of the year, before winter.

“Anyone wishing to purchase it must demonstrate the financial means necessary to stabilize and purchase the building, immediately,” Mehaffy said. “The inn was designated developer for three years or more. That’s not the period we’re talking about now.”

A representative from the inn, who attended the BURA meeting, said he is confident the nonprofit can find a solution with the city.

“This is an extremely difficult project, given the condition of the part of the building that is not the inn,” said attorney Laurence Rubin, who represents the inn. “So it’s going to require creativity and cooperation, and I think that’s what BURA is going to pursue with us.” At least that’s what I hope.

“There is no doubt that the inn’s balance sheet does not justify purchasing the building for the BURA estimated value of $760,000. But then again, I don’t think the building, given the condition of the rear part of the building, can support this value for anyone.

Rubin said the inn’s development team would like to discuss potential development options, including creating affordable housing in the rear building, with agency officials. But he suggested it’s not as simple as just making a proposal with a dollar offer.

“BURA now has full freedom to sit down with the hostel team and discuss this issue collaboratively. And once we have come up with a creative plan, we then need to seek funding for that,” a- he declared. “From my conversations, it seems to me there is an open door at this point.”

But BURA officials say they want something more solid. “There needs to be a purchase price and financial data. We can’t just work on it,” said Hope Young-Watkins, the agency’s senior director.

A city inspection in March 2023 cited nine violations for “unsafe structures,” roof and drainage issues, electrical system hazards and concerns about exterior walls and interior structure. The city ordered BURA to fix the problems and therefore hired DiDonato Associates for an assessment of the building. DiDonato concluded that the building was in even worse condition and was at risk of collapsing or collapsing if action was not taken, and warned that the other building was also dangerous.

BURA approved the $2 million stabilization project in November and informed the inn that it would have to evacuate by March. But the inn argued that its part of the complex was not in danger, leading to months of negotiations while the city agency determined the scope of the work and began calling for bids.

The inn ultimately had until after the solar eclipse to move, but a visit with contractors and inspectors on April 10 resulted in an immediate closure and eviction due to electrical hazards. The inn and its guests were removed, with the city helping the occupants find housing.

In the meantime, BURA launched a tender for the repair work in three parts at the end of April. But the bids all came in much higher than expected — up to 30 percent higher — largely because a city contract imposes additional requirements on hiring local workers, using minority contractors and to women and the payment of “decent wages” – which is not possible. be avoided.

That left the agency with two options that it will pursue. First, managers will determine what urgently needs to be done and whether it can be done within budget.

“The building itself needs to be stabilized before next winter,” Young-Watkins said.

And she will consider selling the building “as is” now, so that a third-party owner can take over.

“That doesn’t mean the building will be perfect in December. We just want to stabilize it,” Young-Watkins said. “We don’t want the building to deteriorate.”