The city could take over demolition of the unfinished Berkman Plaza II as a payment dispute between the building owner and project contractor stalls the planned implosion.
Mayor Lenny Curry will ask City Council on Jan. 11 to approve $1.2 million in emergency legislation that could be used to pay Berkman demolition company Pece of Mind Environmental Inc. to complete the job.
In a letter sent Jan. 6 to city Director of Community Affairs Charles Moreland attached to the bill, Pece of Mind President Steve Pece noted a payment dispute with Berkman II developer/owner Jacksonville Riverfront Revitalization LLC.
He also outlined safety concerns in the event of extreme weather as a result of the 500 E. Bay St. building partial demolition that began in the summer. In August, Pece of Mind halted a manual tear-down because of structural and safety concerns and sought city approval for an implosion.
Pece said his company recorded a construction lien on the Berkman II parcel but had not terminated its contract with Jacksonville Riverfront Revitalization for the renaming demolition work.
He warned the company would end the contract if the account is not brought current.
“This is unique situation since we had to weaken the Berkman II structure to prepare it for the implosion and the building is only rated for 130 MPH wind load,” Pece wrote.
“The weakened state of the building is only meant to be temporary, and I can’t predict nor guarantee the structural integrity of the building in the event of a significant weather event.”
He wrote: “I operated under a good faith belief, patience and hope that the owner would resolve things, but this has not occurred and Pece Of Mind simply can’t continue its uncompensated presence on the project.”
According to city Chief Administrative Officer Brian Hughes, weakening the structure is normal when preparing for the implosion.
Hughes said Jan. 11 that Pece of Mind could remove the protective netting and blockages it installed to trap demolition debris during the implosion if it goes unpaid.
He said the city would move to hire Pece of Mind to avoid another contractor having to redo that work.
The Building Code Adjustment Board has deferred nuisance complaints on the Berkman II to give Jacksonville Riverfront Revitalization a chance to hit a Jan. 8 demolition target, Hughes said.
If Council approves the funding and the board moves to abate the property, city procurement officials could hire Pece of Mind to complete the demotion.
The building is not in immediate danger of toppling, according to Hughes. But he said city officials believe the structure is unsafe and the city should “move quickly.”
“If we thought it was an imminent threat, we would respond accordingly,” he said.
“But we don’t want the question mark to linger.”
Pece said in Jan. 10 letter sent to Hughes that the construction lien is $1,574,560.22.
According to Hughes, should the city takes over the project, the developer would retain ownership of the Berkman II property.
However, the city would issue its own lien to require Jacksonville Riverfront Revitalization to cover the taxpayers’ demolition cost.
How it got here
Jacksonville Riverfront Revitalization co-manager Park Beeler announced this month that a plan to implode the building Jan. 8 had been scrapped due to scheduling conflicts with the implosion contractor and a need to acquire additional liability insurance.
Two previous dates for the implosion, Oct. 17 and Nov. 14, were canceled because of scheduling conflicts, safety concerns and supply chain issues.
In August, Pece of Mind halted a manual tear-down because of structural and safety concerns and sought city approval for an implosion.
The riverfront property is under condemnation by the city.
PB Riverfront Revitalization of Jacksonville LLC, a company controlled by the developer, bought the Berkman II on April 21 for $5.503 million.
Beeler’s team says it has plans to replace the 15-year-old Berkman shell with a mixed-use residential and hotel high-rise.
The building has been vacant since 2007, following the collapse of a parking garage that killed one and injured others.
Pece told Hughes the price could be locked in if the implosion is scheduled before Feb. 25. Pece estimates in the letter it will cost $1,114,000 to complete the implosion.
Hughes said insurance and other costs kept out of that estimate would likely bring the price closer to the $1.2 million requested of Council.
Pece would retain implosion subcontractor Controlled Demolition Inc., according to his letter to Hughes.
The emergency bill expected to be introduced Jan. 11 by Council President Sam Newby on Curry’s behalf says the repeated delays and dispute prompted the administration to act.
“The City of Jacksonville considers the condition of the Berkman Plaza II structure to be an immediate threat to the life, safety and welfare of property and citizens located near and around the structure warranting an emergency appropriation of funds necessary to pay the costs for demolition of the building without further delay,” the bill states.
Council rules require a 12-member majority to approve the emergency in order to take a final vote on the bill on Jan. 11.
Beeler said Jan. 11 he had no comment on the city’s pending action.
On Jan. 7, Beeler acknowledged that his group “was trying to work out an amicable settlement.” He said the change to implosion caused the project’s cost to increase by $2.5 million.
Beeler claimed the payment issue would only delay the implosion by a few days. He declined to say what Jacksonville Riverfront Revitalization owed Pece of Mind.
Hughes said the administration has been willing to work with the developer through the process.
“We’d love to see that property commercially redeveloped to generate new property tax — new office, new residential, whatever,” Hughes said. “But it’s been a blight and it’s moving in to the realm of being unsafe.”