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LONDON CITY COUNCIL: More than $10 million is needed for the work, but the question remains how much each side will ante up


Victoria Hospital South Street campus from Wellington Street. (SUE REEVE/Sun Media) London city council split last night over whether to contribute to the demolition of aging hospital buildings on South Street, putting off a decision the city finance chief says is fraught with risks.

"This is a huge problem that we better resolve before (the hospital buildings are vacated by) June 2011," finance chief Vic Cote told council.

It will cost more than $10 million to demolish the buildings but so far London hospitals have only committed $1.2 million.

A deal supported by Cote would have the city sell the potentially valuable land overlooking the Thames River and using the proceeds to offset demolition costs. Cote estimates that would raise $2.5 million.

The finance chief fears that without the city's contribution there's no chance the Ontario government will come up with the rest of the money.

"In order to bring the province to the table we are going to have to demonstrate or willingness to partner," Cote said.

If the Ontario government doesn't offer the rest -- and it refused an earlier request --that would leave council with a tough choice: Stick the tab to taxpayers or risk the buildings become a blight on a Soho neighbourhood that's struggling to improve.

For some on council, that choice is clear. In 1999, hospital officials promised not to burden local taxpayers with demolition costs in return for city council giving hospitals $15 million for their massive building and restructuring campaign. The 1999 council then made that promise a condition of the grant money.

"The province should be responsible, not municipal taxpayers," Controller Bud Polhill said.

But Deputy Mayor Tom Gosnell said the so-called promise is not so straight-forward.

"It's not cut and dry," he said.

Cote agreed and council heeded his advice that no decision be made until a city lawyer prepares and presents the strength or weakness of the city's position at a subsequent meeting.

"You should wait," Cote said.

Hospital officials backtracked from the promise last year, saying they had expected to get demolition money from the province, but their request had been rejected.

Demolition costs exclude the tab for saving parts of the century-old buildings for heritage, an expense Cote believes would be close to $100 million, a prohibitive cost for even supporters of heritage.

If the buildings hold great liability the land itself holds promise, council member say; the riverside site is walking distance from downtown in a neighbourhood the city is trying to revitalize.