The initial demolition for the Virginia Avenue project was stalled during winter break because of delays in finding a contractor for the job.
The removal of two homes, at 601 and 673 Virginia Ave., was scheduled to occur before Dec. 31, but city officials said they now want to have it finished by the end of the month.
The redevelopment along the avenue's 600 block is estimated to cost East Lansing $3.3 million. The project involves demolishing 24 homes on the block and building 39 new homes and condominiums in their place. The developments are likely to be geared toward families with children because the block borders three East Lansing schools.
The city would have saved money by demolishing the two Virginia Avenue homes before the end of the past year because it could have avoided taxes on the homes' value, said Stephanie Gingerich, a community development analyst for East Lansing.
"We had it in our budget that we were going to pay taxes on the house and the land, so it was an incentive for us," Gingerich said. "It could have saved us a couple thousand dollars."
And with the Virginia Avenue project behind schedule and already about $300,000 over budget, the city is looking at more escalated costs for real estate and construction than it originally anticipated, Gingerich said.
"The development costs aren't always set in stone," she said, adding she can't give an exact number of how much more the city will have to pay.
"As we move on with the project, we're finding ways to cover the costs that do come up."
Gingerich said the delay was caused by tests for asbestos in the homes that weren't finished in time to send out bid packages to various contractors.
"It would have been cost-saving, but with these projects, you never know how long some things are going to take," she said.
Lansing-based S. Sulski Construction Inc. won the bid for the demolition job out of five competing contractors, costing about $10,000 to the city, Gingerich said.
Owner Steve Sulski said Friday the contracts were to be signed with the city that afternoon.
"Once that's done, we'll hopefully get started in a week or a week and a half," Sulski said.
Sulski Construction also has done previous demolition jobs for the city, including the removal of homes near the Family Aquatic Center and close to the Hannah Community Center, 819 Abbott Road, Sulski said.
The city has already acquired eight properties for the redevelopment and is still waiting to finalize the purchase agreements of five other properties, Gingerich said.
"We have different closing dates scheduled for those, so we're waiting until those dates come," Gingerich said. "Because of the holiday, we haven't made any other new agreements with other properties."
