Huggybear:

I spent many an hour [[legally and legitmately) in the Lafayette over the last four - five years. The facade and structural brick systems are showing significant degredation from 18 months ago - at least the areas in your photos are...

The main concern is the delamination of the interior course of bricks on the window columns and what appears to be the complete failure of window framing systems that are collapsing. What you interpret to be pipes I am interpreting to be lintels and floor/ roof slabs meeting the walls and windows. Water penetration from a nearly completely failed roofing and drainage system is allowing significant water penetration. The penetration is causing delamination of the brick which is causing the window framing to collapse. In your bottom photo, it appears the exterior course of decorative brick and stonework between the floors appears to be ready to completely separate and fall off..

Two and a half years ago I asked a handful of contracting firms that were working on historic preservation projects to give me back of napkin estimates to stabilize the roof and drainage systems to prevent further decay. The estimates were woughly $800,000 for a system that would "buy a year or two - maybe", $1.2 million for a similar system and $2.5 - $3.0 million for a more comprehensive system that would last up to five years if the building were under contract for restoration.

Key points here:
The two lower estimates would need an additional expenditure of something in the neighborhood of $200,000 per year to upkeep. The higher estimate was not eligible for tax credits and the system in place would not be reuseable in future development. The entire prophylactic system would be scrapped and that expense not recovered.

Those who say mothballing is "cheaper" than demo have no idea what they are talking about. The demo costs are estimated at $1.4 million. A decent mothballing of the building would run to $4 million or more. In the five to ten year run, demo is a fraction of the cost of mothballing.

In the 10 to 50 year run, the equation becomes fuzzier.

On one hand, you have federal and state tax credits that for the project that are "free money" that will reduce the financing needs of the project. The DDA / DEGC do that very well already, having used some very sophisiticated credits for the Book Cadillac. The question is whether those credits are sufficient to cover the costs of the building renovation AND reduce costs enough to make the project viable. The credits not only must cover cost differentials between new vs. rehab, but they must also provide enough benefit that it makes the project work. Even the new build must have fianncial help because the demand is so weak. Will the historic tax credits cover cost differntials AND market gaps. My gut says no.

Because the property is partially a tax foreclosure, the state brownfield tax credits runs with the parcel not the building, meaning new construction on the site can claim brownfield tax credits - so that has no influence either way in the demo / rehab discussion. BTW, same situation applies to the Statler site.

On the demo side of the equation, the City and the DDA have no money to invest in mothballing for speculative purposes when there are active projects seeking the same funds. The choice is the classic bird in hand now vs. two in the bush - next decade.

The funds being used for demo are funds specifically created by the state for demo. The DDA collects all city and county millages with the exception of bonded debt and the 6 mills for schools that goes into the state school funding pool. The DDA uses the funds it it is eleigible to collect for its loans to projects like the Kales and BC and other investments like the Woodward / Washington / Broadway Streetscapes. The demo fund that was created by Granholm and Kilpatrick allows the DDA, for a period of a few years, to collect up to roughly $8 million from the 6 mills for schools. The state is replacing that missing money from the state school funding with tobacco settlement dollars. Schools do not suffer and the City gets a pool of dollars to work with for demo, so it is not forced into the very tough decision of: "write five small business loans or demo a building." They now can write the five loans and move forward with blight removal.