NEW ORLEANS — The city of New Orleans issued the owners of the collapsed Hard Rock Hotel a permit to tear down the remaining portions of the unstable, 18-story structure, after more than six months of rancor and shifting demolition plans.
The partial collapse on Oct. 12, 2019, took the lives of three workers, injured dozens of others and closed several nearby buildings. Areas of Canal Street are still blocked off to traffic.
"The city is prepared to issue a conditional permit so demolition can proceed, subject to payment of appropriate costs," City Attorney Sunni LeBeouf announced Thursday morning during an online court hearing before Orleans Parish Civil District Judge Kern Reese.
By mid-afternoon, the property owners, 1031 Canal Development and principal owner Mohan Kailas, had paid more than $63,000 in permit fees and received the permit, with various conditions.
The agreement came after weeks of insults and delays in court. Mayor LaToya Cantrell issued a statement after the agreement was announced, one that still struck a somewhat combative tone:
"The property owners have an obligation to address the damages they’ve caused to this City and its residents as a result of their collapsed building. There is no more time for delay, and a safe demolition should move forward immediately."
Based on previous statements and schedules released by the owners, they could have equipment at the site, ready to start the 6-month-long demolition process by next week.
The city set several conditions for the permit. Principal among them, the city is now requiring the property owners, Mohan Kailas and his partners at 1031 Canal Development, to come up with $32 million in liability insurance coverage for the $8.4 million job.
As recently as this week, the city had asked for $25 million in "project-specific insurance coverage." 1031 Canal's demolition contractor Kolb Grading has secured $16 million in general liability coverage and subcontractor Marschel Wrecking has another $6 million, for a total of $22 million.
The Kailas family that developed the Hard Rock Hotel project has a history of corruption, has struggled to pay its share of costs since the collapse and the city has accused it of constantly seeking the cheapest option for demolition.
Other conditions for a final permit, laid out in a letter from Interim Safety and Permits Director Tammie Jackson, include revising engineering plans to better control falling debris and a signed contract for maintaining the property and controlling traffic around it. It's unclear how quickly 1031 Canal and Kailas would be able to meet those requirements.
A detailed engineering plan filed by Kolb on April 17 set a schedule that would put cranes at the site 10 days after the city approved a permit, would start demolishing three small buildings next door in 16 days and would start taking down a damaged crane lying across the top of the Hard Rock Hotel within 20 days.
The remains of two of the workers who were killed in the October collapse, Jose Ponce Arreola and Quinnyon Wimberly, are still trapped in the building by tons of concrete and debris. Kolb's plan is to have a third party extract their remains at the same time as the demolition crews are taking down the top 10 steel-framed floors of the building. That's now likely to happen in June, assuming Kolb can keep the schedule it laid out April 20, with what's already been a 10-day delay.
The city and 1031 Canal also struck an agreement to hold off on code enforcement fines for violations the city identified.
The city previously expressed concern that it didn’t have detailed enough engineering analysis of risks in the 60-foot drop zone, so it could assess what might happen while demolition crews knock down 10 floors of mangled slabs of concrete and twisted steel.
And Rachel Wisdom, an outside attorney representing the city in the litigation, said earlier this week that the higher insurance coverage limits were necessary because of the risks to surrounding property and infrastructure.
“The proposed demolition work is extremely dangerous and risky with the potential for an uncontrolled collapse or other unplanned events that could potentially cause damage to adjacent properties, utilities, and people at or near the site,” Wisdom wrote. “If this is not a significant risk, as 1031 Canal has asserted to the Court, then obtaining the required insurance should be relatively easy to accomplish.”
RELATED: As Hard Rock demolition plans inch forward, preservationists worry about historic buildings nearby
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