Financing issues blamed for pause of demolition
Nearly a year and a half later, a pile of rubble still remains in downtown St. Catharines, where the historic Welland House once sat. A financial dispute appears to be the cause.
Those who frequent St. Catharines’ downtown core would have noticed that work to demolish what’s left of the Welland House at the corner of King and Ontario streets stopped last summer and hasn’t started up again. The historic building burned down on July 12, 2021.
According to Mike Starnino of Starnino Environment Recovery Inc., the company in charge of the demolition, stopped working because the property owners hadn’t paid them.
According to Starnino, he’s owed about $350,000.
The site is owned by 2272872 Ontario Inc., and the company’s chief financial officer, Amit Jain, told Niagara This Week they’ve been having problems securing financing.
“We were working on getting the financing for the property to get the cleanup work done, and restart the redevelopment work and we got a term sheet, a couple of term sheets, and then because of the Bank of Canada credit rate increases, those guys withdrew the term sheet,” Jain explained. “So they withdrew the term sheet because of what they said is adverse interest rate environment for them to fund us.”
Starnino said the company has received only a small percentage of what it’s owed.
“We’ve just put a lien on the property. They’re not paying anybody.”
Starnino said demolition is about 80 per cent finished, and if he completed the job now, he’d be out about $500,000.
“This is the first time since 1959 that we’ve been in business that we’ve had to (put a lien on a property),” he said. “I’ve never had this problem before.”
According to Jain, they’ve had to restart all the work on securing financing, but stay committed to the project.
“As a company, as a group, we are fully committed to the project,” he said. “The fire was very unplanned. We did all the work, based on whatever commitments we made. The owners of the property have personally invested the money in this property.”
Jain said 2272872 Ontario Inc. has owned the property since 2015, but did not elaborate on what the future plans for the site are.
According to Jain, they were denied insurance for the building because it was too old.
“They said ‘your structure is unsustainable,’ ” he recalled.
To their credit, both Starnino and St. Catharines’ chief building official John Lane said 2272872 Ontario Inc. has been very communicative through the process.
According to Lane, demolition work came to a halt sometime in late July of last year.
Through the Ontario Building Code, Lane said the city would be allowed to revoke demolition permits after six months if work never began, or after 12 months if work is suspended.
Consequently, Lane said he will not be in the position to revoke the demolition permit until late July of 2023, so for now, his hands are tied.
If the permit was revoked, the city’s municipal law enforcement team would issue orders to “clean up the property if voluntary compliance isn’t achieved.”
“We continue to monitor the property weekly (sometimes daily) to ensure the temporary fence that protects the property remains in place,” he said. “However, I learned from the conversation that plans were being made to resume the demolition when the conditions are right.”
Both Lane and Jain are hopeful demolition can resume soon.