The city of Valparaiso may have another legal option, when it comes to an unfinished medical building. Work on 1425 Glendale largely ground to a halt in 2021, as the developer stopped paying its contractors. A potential sale has been held up by an ongoing legal battle over an unrecorded covenant that would prohibit the property from being used for many medical purposes.
But building department attorney Alfredo Estrada says there is a state statute that would let the city auction the property, if it's deemed unsafe and abandoned. "It also states that encumbrances, except for easements, are not acknowledged in this act, in the auction," Estrada told the board of works last week. "So it's our thought and our interpretation of the law as it is now that the hospital's unrecorded covenant would be irrelevant during that process."
The city's other options are to wait for the legal challenges to go through the appeals process or order the unfinished building to be demolished. Attorney Paul Chael is the court-appointed receiver for the property. He said tearing down the building wouldn't be fair to the contractors, who are currently owed about $3.5 million.
"They're going to be out of luck," Chael told board members. "I mean, the contractor clearly has no assets. He wasn't able to pay them. I don't think there's any magic pile of assets."
The board of works agreed to continue discussing the matter in July.
