An unfinished medical building in Valparaiso that's sat vacant for years may finally be completed. Construction on 1425 Glendale began in 2018 but ground to a halt around 2020, as the original developer failed to pay its subcontractors and eventually filed for bankruptcy.
"I've heard everything from 'blight' to 'an eyesore' to 'ugly' to 'a stain on our community that's right across from ValPlayso,' and I think the community's been fed up," Valparaiso Development Director George Douglas told the city council last week.
Now, Hasse Construction Company is spearheading the effort to finish the building in a project called the Viking Medical Center. Douglas said the project will transform the building from an eyesore to a jewel in the community.
"There is nothing like it in Valparaiso," Douglas said about the building plans. "We're not seeing buildings like this being built with covered parking, three elevators in a 43,000-square-foot space, that atrium you pull into, the lobby — the whole nine yards is phenomenal."
But there's still a lot of work to be done. The developers expect to spend at least $7.1 million to finish the building's shell.
Douglas said it's been open to the elements for about six years, and untreated metal structures are starting to rust. "Because the building was started and then stopped, all the drainage for the last four years has been pouring inside the building," Douglas explained. "So, you've got all kinds of mold and soils that will now have to be scraped and removed and then replaced."
Hasse Chief Operating Officer Bill Hasse said most of the previous subcontractors have agreed to come back to finish the building. "We do have the backing of experienced developers and interest from multiple possible future tenants for this property, so we're looking to move quick on it," Hasse told council members. "And then Hasse Construction does have the knowledge and expertise to turn this dilapidated eyesore and turn it into a high-end medical office building."
To help with the process, the city council agreed to grant a pair of tax abatements last week — one phasing in property taxes on the vacant building over three years and another phasing in taxes on the improvements over seven years. In return, the developer will pay an impact fee to the city's redevelopment commission. The Viking Medical Center is expected to create about 60 jobs, with an average annual salary of around $90,000.
Mayor Jon Costas said the project is an example of a "local hero" stepping up to bring new life to a vacant building. "So when I heard Hasse took this on, I mean, I wanted to jump up and pump my fist in the air," Costas said. "That was a good day, and this is not an easy project. You don't even have a tenant yet."
The shell of the building is expected to be completed by mid-February of 2025.
In the process of preparing the tax abatement, city officials discovered that for the past four years, they may have been granting abatements to properties that weren't technically eligible. Before granting an abatement, a property typically has to be designated an "economic revitalization area" — essentially an area that would otherwise have trouble attracting development.
To streamline the process, the Valparaiso City Council created a blanket economic revitalization area in 2010, covering several commercial and industrial areas. But City Attorney Patrick Lyp said that designation expired in May of 2020, and, apparently, no one noticed until now.
"The potential concern would be any of the tax abatements between 2020 and, candidly, this evening, in that it might not be in an ERA."
The city council passed a resolution last week extending the 2010 economic revitalization area through the end of 2031. That covers the length of all the abatements currently in effect. Lyp was confident that would be enough to correct the oversight.
