BY MAIRE O’NEILL
Wednesday, March 30 was the deadline date for New Mexico Innovation Triangle, LLC to complete demolition of the former Hilltop House Hotel building and clear the property of debris, however, because that deadline has not been met, next steps for the County was on the agenda for Tuesday evening’s Los Alamos County Council meeting. The March 30 deadline was set by Council in an October 29, 2021 resolution that declared the 400 Trinity Drive property a menace to public comfort, health, peace and safety.
Prior to that resolution being approved, Los Alamos County Fire Marshal Wendy Servey had issued an order declaring the building a clear and inimical threat to human life, safety and health. She ordered NMIT to provide proof by November 24 that all the necessary permits for completion of abatement for fire code violations that existed at the time in the hotel be obtained. The other option was for NMIT to provide proof by November 24 that all permits for demolition of the structure had been obtained. NMIT has been aware since September that Servey had serious concerns about the building.
When it became clear that NMIT did not intend to meet the deadline, the item was placed on the agenda with a staff recommendation that Council direct County Manager Steven Lynne to enter negotiations with NMIT and bring forward for consideration a proposed agreement for Council consideration at the April 5 meeting.
Tuesday’s discussion generated more questions than it answered and nobody from NMIT was on hand to answer questions.
County Manager Steven Lynne noted that NMIT had begun their efforts. He said under the “clean and lien” resolution passed by the Council, the County has the right to step in and do the demolition itself and place a lien on the property to collect the cost.
“Another alternative, which is the one we’re recommending, is since they have initiated some work basically seek some reassurance from them in the form of a written agreement that the remainder of the work will proceed in a timely manner with some negotiated schedule and use that as our reassurance that at least from this point forward things will proceed more expeditiously,” Lynne said.
The agenda package included an email from NMIT’s attorney Karl Sommer received Friday afternoon shortly before Tuesday’s agenda was distributed. That email requested an extension to June 30 to complete the work.
“We propose that we enter into an agreement related to that deadline, with an escrow of cash to be made which (sic) satisfy a daily penalty for non-completion by the June 30, 2022, date. I propose a daily penalty/liquidated damage of $350 per day and deposit of $35,000 to secure the payment of the penalty or liquidated damages,” Sommer said. “I would appreciate the County’s consideration of this proposal. It would seem more expedient to have my clients finish the work, as it has begun, a contractor is in place to do the work, and the County would be starting from the beginning.”
County Economic Development Administrator Dan Ungerleider in an update of the situation as of Tuesday afternoon, said NMIT is in the process of removing combustibles from the building and has received a permit from the County for asbestos removal but that process has not yet started.
“They have submitted an application for a demolition permit application for the building. That permit was denied because it was missing a demolition plan, a traffic plan and a life safety plan. I’ve been in continual conversation with one of the owners as well as our Building Official and I believe fire safety has also been in communication with them. We are here to assist them when they are ready to proceed,” he said.
Councilor David Izraelevitz was first out of the box with questions and comments.
“My understanding from the December 3 meeting was that the contractor gave an estimate that after mobilization it would take six to eight weeks to completely clear the property. Why are we looking at eight weeks to do a partial removal?
Lynne responded that the contractor that spoke on December 3 meeting when NMIT had appealed the County’s resolution was at that point hired for some limited scope assessment and that at this point in time the owners have selected a different contractor and all the County has from them is their current information. He said the County has been given an estimate that asbestos removal alone could take up to eight weeks.
Councilor Izraelevitz said he guessed the burden would be on NMIT to explain why their contractor testified before Council certain estimates and certain expectations.
“Now Council is being told that person is gone and here’s another person and by the way, it’s going to take months more than was originally expected. They’re telling this to us a couple of days before the deadline. That does not engender in me, to be frank, much confidence that this really is a frank conversation between the two parties and it doesn’t engender in me an idea that we should have a very collaborative assessment so I would like to have more information about this,” Izraelevitz said. “We may wait another week to give them this feedback which I hope they are gathering as we speak. Myself, as an individual councilor have pretty much ended my patience with trying to accommodate their lack of being able to get a fence contractor, the repairs that needed to be done to the fencing and so forth. All of these things are just cumulative at this point and now a few days before their deadline, they give an incomplete demolition permit application.”
He said he would like to get a good independent estimate of what the total cost would be to perform the full asbestos mitigation and demolition and then have the liquidated damages be proportionate to that and maybe in some way to motivate the poject to be done ahead of time.
“We’re already months behind…. I would like to validate what’s a reasonable time to get this done and I would like to validate the real cost to have this done and the process that contractors would be looking to use and also understanding who the contractor is and making sure they have the right bona fides so that they can do this work so that we don’t find out again in a couple of months, again at the last minute that that contractor has gone and there’s another contractor,” Izraelevitz said.
There was a question about whether all the combustibles had been removed from the building. County officials were unable to confirm as they have not been inside the building however Lynne said NMIT has represented to the County that they completed that work even earlier than they expected and that they are done removing the combustible materials. Fire Marshal Wendy said she had not been inside the building but that she doubted that all the combustibles had been removed because she drove by every day and only saw mattresses in the dumpsters and that there is a bunch of probably wood furniture that she never saw being removed.
Councilor Sara Scott said she supported the questions asked by Councilor Izraelevitz. She said clearly with the asbestos removal that it is done correctly.
She said she wanted to know why the approach had changed, why there was such a big change in estimates and why the communication came so late.
“Fundamentally what we’re trying to do here is to resolve safety issues,” Scott said.
She said if Council decides April 5 to revisit the project, she would also like to know if there could be a fire safety walk-through to find out where things are at with the safety issue. She also said she would like to know what the timeline would be if the County was to undertake the project itself.
Scott said if Council decided to allow a week for Lynne to talk to NMIT she would want a real assessment of the likelihood of success.
“I agree that at the end we just want to get this done, we want to know that we’re on a path to complete the efforts and we don’t want to be in a situation where we find ourselves with more months of delay. Part of that is understanding what’s changed. Part of that is understanding at what point in this process now as we proceed over the next several months are we going to have mitigated the majority of the fire safety issues and other health safety issues, and what is the option space going to look like between us pursuing this versus the approach we have with the owner pursuing it and are there ways to incentivize it,” Scott said.
In response regarding the likelihood that of the project actually proceeding with NMIT, Lynne said starting with a presumption that the County thinks the work is going to proceed, he presumes NMIT could execute the project quicker than the County given that they already have a contractor on board.
Chair Randall Ryti asked if NMIT has been in communication with the Fire Marshal. Servey responded that they had a meeting March 2 with the second contractor and they asked questions per the fire code about what was required of a potential demolition plan. She said they told her they were acquiring dumpsters and were removing combustibles but that was all the communication she had.
“In that March 2 meeting with them I communicated that if they were going to ask for an extension that they do it through the County Attorney’s Office and I have not received any word per the Fire Marshal’s Order. That’s the only thing I could go on so I told them if they were going to ask them for an extension for that they go through the County Attorney’s Office but I have not heard anything,” Servey said.
Ryti also asked if anyone from NMIT offered to attend the meeting. Lynne he didn’t know if any of them offered.
“I know we wanted them to be aware of it. I can tell you that we did not encourage it at this point because I was not anticipating a question back and forth with them given the nature of what we were presenting we anticipated negotiating at a staff level,” Lynne said.
Ungerleider said he spoke with NMIT’s Larry Hawker before the meeting started and shared a link to the meeting.
“So they might be in attendance but that was because they were interested in hearing the conversation,” he said.
Ryti also asked about the demolition permit application submitted by NMIT that had been denied.
“You said it was missing a demolition plan. How do you have a permit application without the main thing you’re trying to do. We’re all kind of frustrated with this process so can you elaborate on that?” he said.
Ungerleider said the application form was completed and attached to it was the proposal from the demolition contractor that was probably submitted to the owner of the property and that was all that was attached. He said a demolition permit requires more detail than that per the County code and that the required documents had not been received as of the beginning of the meeting.
After more discussion, Council voted unanimously to take the staff recommendation.
Councilor Derkacs said NMIT had the opportunity in its appeal of the County’s resolution on December 3 to request an extension to the March 30 deadline but hadn’t done so. She said not surprisingly NMIT is now behind schedule but that they had removed debris and at least some combustible materials from the building and had scheduled asbestos removal to begin this week.
“(NMIT) has now submitted a request for extension until June 30 by email and since the County would have to publish an RFP demolition, review the bids and then select a contractor, all of which would take time and associated expense, I’m willing to allow the negotiations between the County Manager and NMIT to establish a path forward that provides specific scheduling and rigorous oversight including inspections for consideration at our next meeting,” she said. “I want to conclude by saying that I’m committed to holding NMIT ultimately accountable for compliance with Council’s resolution but I am willing to give them an extension depending on the outcome of the negotiations.”
Councilor Scott said she supported everything Derkacs said and added that although it wasn’t specified in the motion that the questions that were asked by Council be included or addressed in whatever agreement Lynne negotiates with NMIT.
“I would also like to add that I would like to understand the safety profile for any proposed path forward for this potential agreement so that we understand progress towards health and safety issues because fundamentally that’s what we’re working towards. Clearly the final demolition will be the whole outer part coming down, but we should make incremental progress towards a better safety posture and I would like to understand what that looks like over any negotiated timeframe,” she said.
Izraelevitz said he thinks there are a lot of questions that need to be answered by the April 5 meeting.
“I am willing to support the extension to get the answers to all these things but under the condition that we really have a tight schedule, bonding issues that really make it more advantageous to the contractor to do what they’re supposed to do rather than incur the lien because they’ll have to pay the lien at some point anyway and I’d rather it get done. It will take longer for us but we will be in control of the process. We’ll know that it will get done and we will have our own plans and demolition permits and so forth,” Izraelevitz said. “I will only accept an agreement with NMIT if I really feel that the risk of going on with this is substantially lower than just doing it ourselves because I think for the public this property has been broken into multiple times, the fences have not been maintained, there are still apparently combustibles left in the building. So this is just irresponsible at this point in my opinion to have this condition. I really hope that we can find a resolution in a week but if not we will have to exercise this clean and lien thing which I believe we haven’t done before but it will be a learning experience for all of us.”
Chair Ryti said the situation is very discouraging.
“If you think of the bare minimum that somebody might have done to avoid us taking our own action, this may be it. It’s really discouraging that this is where we are. I don’t know what percent you might say the project is compared to where we were in December let alone that since the inspection occurred in September there’s been ample opportunity for the owner to do something and they have not done it,” Ryti said. “They have had minimal communication, they have not asked the Fire Marshal who could certainly do an inspection whenever she wants, but they could invite her in and say here’s all the progress we’ve made. They have not done that. They have not offered to do much else in terms of involving the County and it’s based on the very bare minimum. I know we don’t have a lot of good options at this point and I’m very skeptical of this working out but I’ll give it one more week to see if we can negotiate something that would have some substantial teeth to it to make sure that they will actually do this.”