Council agrees to begin hazardous-building process for 115 Fourth Street after staff flags contamination and structural failure

Steve, a Public Works staff member, told the Gaylord City Council that a structural engineer and the city’s building inspector both concluded the commercial building at 115 Fourth Street is in poor and failing condition, with a partially caved-in back addition and contaminated soils extending onto the parcel.

"The property to the South is considered the responsible party," Steve said, describing how the Minnesota Pollution Control Agency has required soil borings and environmental consulting to determine contamination levels. He told the council staff recommends treating cleanup and demolition as separate projects, with the cleanup managed by the responsible party and demolition a separate procurement and construction effort.

Mark, a member of city staff, briefed the council on funding and timing options. He said a matching grant program through the state Department of Economic Development (grant rounds open in February) allows demolition as a qualifying expense but operates on a schedule that could push work into the following year. "The next grant round is not until February," Mark said, adding that the state has roughly $2 million per grant round for the entire state and that qualifying requires meeting occupancy or job-creation criteria.

Staff emphasized the financial uncertainty of pursuing the grant route. The council heard that demolition and cleanup could be paid from the city’s capital projects fund, but that would reduce available funds for other planned work. Staff noted the city had roughly $900,000 in the capital project fund at the end of last year and would face a roughly $100,000 shortfall on a separate pavilion project, indicating limited spare capacity.

Council members asked whether adjoining property owners could be held liable if they were the source of contamination; staff said the state treats the owner of the source property as the responsible party and recovery of city costs is possible but often difficult and contingent on establishing a clear causal link between contamination and costs. Staff also described the administrative route to declare the building hazardous — including giving the owner notice and, if necessary, a small hearing before council — and recommended beginning that process while continuing to seek developer interest and grant opportunities.

Council members expressed concern about safety given the caved-in wall and the building’s general condition. The council reached consensus to direct staff to start the hazardous-building process (including outreach to the owner to seek a stipulation) and to pursue grant funding where appropriate, while acknowledging the city may ultimately choose demolition funded through capital accounts if grant timelines or owner cooperation do not align.

Next steps: staff will pursue owner engagement to secure a stipulation that would streamline the hazardous-building process, continue outreach to potential developers, and return to the council with updates on grant applications or specific demolition proposals.