Insurance Questions Hang Over Governor Prence Project

By: Ryan Bray

Topics: Development , Orleans news , Affordable housing

Orleans officials have been notified that they have 45 days to complete certain repairs to the existing Governor Prence Inn buildings or risk losing the town’s $1 million insurance policy on the property. Officials say the repairs are not needed as the town plans to demolish the structures. FILE PHOTO

ORLEANS – The select board wants clarity on the town's insurance policy on the Governor Prence Inn buildings, which Town Administrator John Kelly said the town could be at risk of losing.

Kelly told the board Jan. 12 that he received communication from Lloyd's of London, which is insuring the building, that the town has 45 days to make needed repairs to the property, otherwise it could risk losing its $1 million policy on the 5.5-acre site on Route 6A.

The specified repairs include the replacement of damaged roof shingles on four of the property's buildings, cleaning of gutters and the removal of low-hanging tree limbs on the property.

"We don't have an appropriation to do the work, and quite frankly, I don't know what the cost would be at this point," Kelly said of the requested repairs. "It certainly can't be done in 45 days."

Voters authorized spending $2.9 million to purchase the inn property at last year's annual town meeting, and the town closed on the property in the fall. A building committee has been meeting since October to help guide the town through potential options for using the site in the future.

But the town plans to demolish the existing five buildings, and select board members said the called-upon repairs aren't justified. Kelly said he is working with Lloyd's of London to change its policy to cover "general liability" of the property instead of the buildings themselves.

"Should somebody get hurt, this is protecting the town," Kelly told the board.

The earliest the buildings could be demolished is this spring, and that's if funding for the demolition is approved through annual town meeting in May. That would leave the property uninsured for months if the town's existing policy is discontinued.

"We cannot have this property with no insurance on it," Kelly said. "This is a liability that the voters of this town did not anticipate when we purchased the property, that we would have buildings sitting there potentially for multiple years with the town incurring an ongoing expense."

Without coverage, taxpayers would have to pick up the cost "dollar for dollar" of insuring the property, Kelly said.

The town also needs to begin work preparing a property survey and topographic plan for the property, as well as preparing a design plan to demolish the buildings and restore the site. The survey will help determine the presence of asbestos and other potential pollutants on the property, as well as establish lot lines.

Asbestos and lead have been found inside each of the buildings, but the walls have not yet been excavated to determine the extent of the material, Kelly said.

The town has $100,000 that was authorized for that work through the annual town meeting last May. The select board and the affordable housing trust board, which jointly own the property, each have to vote to spend the money, Kelly said.

"We would demolish the building and restore the site," Kelly said. "So we would have a clean site, all the asbestos, all of the contaminated soil, anything that's there is removed."

Select Board member Mark Mathison said talk of beginning work on the site survey dates back months.

"That needs to be priority number one, and I'm certainly ready to vote if you need a vote," he said.

Kelly said that there will be additional costs to the town to further supplement the project. Andrea Reed of the select board asked if cleaning up and restoring the site could be considered part of the town's ongoing contribution to the property instead of putting more money toward the project.

"Demolishing [the buildings] now, cleaning up the site...that's Orleans' investment in making sure that the next use of the site is truly in the public interest," she said.

But Mathison said the site study is first needed to determine what, if anything, needs to be cleaned up on the property.
"Before we commit the town to a major investment above and beyond the $3 million that we've put into the property already, we need to know what we've got," he said.

The board voted 5-0 to begin work on the property survey and topographical plan, with Select Board member Kevin Galligan also calling for an estimate on what the work will cost.

"If we authorize this, this board needs to have a tracking of all the costs, because I don't see anyone else in town doing it," he said.

The board also unanimously voted for insurance purposes to commit to not letting the existing buildings on the Prence property be inhabited.

As for demolition, the select board held off on a vote until a proposed joint meeting with the affordable housing trust board that was scheduled for Jan. 18. Kelly said that in order to go to town meeting for demolition funding in May, the town will need to have "bids in hand" showing what the cost of work will be.

"It's going to take a couple of months to get that all together," he said.

Email Ryan Bray at ryan@capecodchronicle.com