Birmingham approves $3.7M for Carraway Hospital demolition
The developer for the future $346 million Star Uptown project is receiving a cash advance from the city of Birmingham.
On Tuesday, the city council approved giving Corporate Realty $3.7 million in American Rescue Plan funds to finish demolishing the former Carraway Hospital.
In December 2020, Birmingham originally agreed to give the developer $4.1 million for demolition, plus another $9 million in future tax breaks.
At the time, Corporate Realty said it would tear down buildings as it constructed different phases of the project.
During the leasing process though, they realized it was cheaper and more efficient to tear down all of the buildings at the same time.
That requires more cash up front, Corporate Realty's Brian Wolfe told the council this morning.
"We are trading $4.5 million of future tax abatements for $3.7 million in ARPA funding which will allow us to go ahead and complete all of the blight removal at one time, versus more of a piecemeal execution," Wolfe said.
The city's total investment in the project is now worth about $1 million less than the original, after Tuesday's 6-1 vote.
Councilor Valerie Abbott was the lone no-vote and worries that taxpayers are being asked to foot too much of the bill.
"My concern is if the developer doesn't have the money on the front end to even do the demolition of the blight, where is the funding coming from for all of the other phases?" Abbott asked.
Wolfe said demolition should be complete by late Spring 2023.
The entire project could be finished four to five years later, he said last week.