State of Grace? It’s an issue that’s decades-old
Still no timeline on sale of former hospital site in St. John’s
It’s been about two decades since the Grace Hospital in St. John’s closed, leaving a property with location, location, location to languish to the point it’s mainly seen as nothing more than eyesore.
During boom economic times, the property had been earmarked for a court complex, but that plan seems to have fizzled.
Several years after the
Grace closed, most of the hospital’s buildings were torn down, except the former seven-storey nurse’s residence, the top of which has a spectacular view of the St. John’s harbour; the property fronting Lemarchant Road is situated on the edge of the downtown.
But it quickly became the target of vandals, birds, rodents and the rages of weather.
Photos contained in a 2018 environmental assessment reveal mold so bad it’s glowing radioactive green. For a building of its era, it has typical contaminants like asbestos, the toxic industrial compounds polychlorinated biphenyls (PCBS), mercury, radioactive sources for smoke detectors and also, due to the deterioration fecal waste from birds and rodents, as well as silica and lead.
It was the second environmental assessment — the first having been completed before the other structures were torn down.
In 2019, the province paid $7,500 for a market analysis on the Grace property, one that Transportation and Infrastructure Minister Elvis Loveless admits, although he hopes to avoid it, might have to be redone given it was a pre-pandemic document that envisioned mixed uses such as hotel, retail, office space and residential possibilities.
“Given the magnitude of the buildable area potential and the high cost associated with development options, potential buyers would include wellcapitalized local or regional developers, national investors, or potentially institutionalized real estate investors. Given that development of such sites often involve multi-year holding periods, the relatively high holding and development costs may deter smaller local developers or investors,” the assessment states.
That document revealed that hotel, office, retail and condo space were already abundant in the greater metro area. Since then, the pandemic tanked the tourism sector (except staycations), as well as created a new work-at-home culture.
The market assessment was part of an access-to-information response supplied to The Telegram. For province, breaking up seems hard to do
Other reveals in the response include a growing frustration by the City of St.john’s to acquire a sliver of the former hospital land to satisfy a developer’s interest in an adjacent heritage property, the old West End Fire Station.
The bit of land to square off the property would allow the project to meet parking requirements for the developer’s residential proposal.
Mayor Danny Breen told The Telegram the responses he and staff have had from the province have not been positive. He said it seems the province is still reluctant to break up the Grace site.
“It’s frustrating because there’s redevelopment happening on Lemarchant Road,” Breen said.
There’s a proposed residential development for the former Brookfeild dairy site, as well as commercial at the former Grouchy’s Tire building. Urban Market 1919 opened in a nearby former convenience store.
Breen would like to see the Grace property privately developed with some mixed use.
“It has all the elements of a very exciting development,” Breen said.
Been says the issue of the site is constantly brought up to the city or to him personally, much of it to do with garbage, illegal dumping and other eyesore issues. And the city can’t enforce its bylaws on a higher level of government, though it does alert the province to issues.
Complaints revealed in the access response include the dumping of carpeting, televisions, furniture, a car that was left there for years, and even a toilet.
PUBLIC HOUSING PITCH
Newfoundland and Labrador Housing has made pitches for a couple of public housing projects on the Grace site.
And Education Minister Tom Osborne has floated the idea of trading land there in exchange for Habitat for Humanity’s controversial project on an Eric Street greenspace in his district.
Loveless, who has a real estate background, said he’s been made aware of interest from a real estate agent.
Loveless told The Telegram he hasn’t closed the door on anything. He can’t put a timeline on when the file will be moved off his desk, as he wants to do due diligence, and he has no explanation for why the site has languished year after year, decade after decade.
“My take on it is it has been too long,” he said. “This should have been dealt with before.”
Loveless said he wants to get the best return for the provincial taxpayers and described it’s a challenge in every sense of the word.
“Hopefully, I am the one to get it done, finally,” he said.
As for why he won’t give a timeline, he said if he did that, and the date came with no resolution, then that would be the story.
DISCOUNT SALES
One thing revealed in the market assessment is that governments discount a property’s value by 25 to 94 per cent when they use the public tender sale process.
Granted, there are environmental costs that aren’t always known at the time of bidding, demolition considerations and other factors.
Cleaning up the site now, including demolishing the former nurse’s residence, has an estimated cost from $1 million to $4 million.
But when the former IJ Sampson school was sold in the neighbourhood for $58,500 an acre by the school board, the developer that knocked it down then sold the land for $563,000 an acre.
Similarly, a Canada Lands redevelopment on Charter Avenue in Pleasantville — the former U.S. military base — was turned around by the private purchaser for 17 times the original purchase price after demolition and cleanup.
The value of the Grace site both cleaned up and “as is” was redacted. However, comparables hover around $200,000 an acre to roughly $500,000 remediated, and some as high as $900,000.
At 8.74 acres, that could make it worth $4.4 million or more.
So what’s the lesson here? When the market is ripe for properties to be sold, the government should act on that and get it done,” Loveless said.