WORTHINGTON - Following a walk-through of the Thompson Hotel, the Worthington City Council voted Wednesday afternoon to proceed with the planned re-roofing project and also to tag the residential floors of the building as unsafe for human habitation.

The building tour, which included city council and Worthington HRA board members along with representatives from the engineering firm Short Elliot Hendrickson, revealed the Thompson’s squalid conditions.

Immediately upon entering, tour members’ senses were assaulted by the smell of commingled mold and cigarette smoke, which permeated both residential floors. Second-floor ceilings were missing tiles, and remaining tiles were stained from water damage. The third floor ceiling was more tarp than actual plaster. Hallways were lined with buckets for catching drips.

Hallway floors creaked with nearly every step, exhibiting weak integrity.

Vacant residential units contained empty bottles of Jose Cuervo, broken appliances and piles of trash. Although the rental units explored were unrented, there was evidence of recent human occupancy in some. One unit even had a cell phone in the closet.

Worthington Director of Community Development, Planning, Zoning and Building Services Jason Brisson explained that receiver Lighthouse Management Group has deemed at least five of the 39 units in such bad condition that the company wouldn’t feel comfortable renting them to tenants.

The tour also extended to the basement, where Brisson said he had never previously gone. The basement was in as poor shape as the rest of the building. The ceiling had fallen in a few places, leaving a mess of drywall and mildew.

Damage is also evident on the outside of the Thompson, as a look through a second-story window showed loose bricks near the roof in several places.

Notably absent on Wednesday’s visit were insects and other pests. Plunkett’s Pest Control began pest remediation last November, a measure that appears to have been effective.

The debate

Returning to council chambers, the combined city council and HRA board attacked the problem from several angles before the city council voted.

First, they addressed the question of whether the HRA would feel comfortable being involved in saving the Thompson.

Council member Alan Oberloh said he had met with the board and learned “the HRA does not have the financial wherewithal to take on this project.” If Worthington intervenes at all, financial responsibility will need to fall on the city.

However, HRA Executive Director Randy Thompson said the HRA is prepared to manage the property if and when it is restored to livable conditions. It would require at least two on-site employees for management and maintenance, which Thompson estimated would cost $100,000 annually in salaries and benefits.

HRA board member Marty Rickers pointed out that the 39 units are not uniform in size, so it would make sense to reduce the number of units and make their square footage consistent.

Brisson thought it should be decided which department would handle project management if the city decides to refurbish the building. Oberloh responded that city staff would make the most sense, since it would be taxpayer dollars expended on the potential project.

Council member Mike Harmon asked how many of the units are currently rented. Brisson said that Lighthouse Management does not actually know how many apartments are rented, or how many total people occupy them.

Oberloh pointed out that the first-floor commercial space is currently supporting all the expenses for the building, and tenant rent payments are just a bonus - so the Thompson can be sustained without having any residential occupancy if needed.

A major concern of the group was the potential expense of saving the Thompson. HRA board member Lyle Ten Haken posed a central question.

“What is the city of Worthington’s appetite to preserve a historic building?” he asked, and it was noted it may be cheaper in the long run to simply build 39 brand new units of rental housing. The Rising Sun development cost $135,000 per unit to build, and as costs add up on saving the Thompson, $135,000 per unit could seem like a bargain.

Rickers agreed that it is important to determine whether the Thompson is even worth rehabilitation.

Brian Bergstrom, a senior architect at SEH, said it would require a lengthy and costly study to determine the precise scope of a rehabilitation project.

As a frame of reference, City Administrator Steve Robinson speculated that if it would cost $100,000 per year to pay employees and $50,000 to pay off a 30-year mortgage, at current rates that would leave the city with a budget of $864,000 to renovate the building.

“That barely gets you started,” Bergstrom responded.

Bergstrom said he recently worked on a similar project in Red Wing. It was a renovation of a three-story building from the 1930s with less square footage than the Thompson. The project cost about $4 million at $205 per square foot.

At that same rate, renovating just the two residential floors (32,000 square feet) of the Thompson would cost more than $6.5 million.

Brisson clarified that at this point, the city just needs to decide if this is a route it wants to take. He said there are three possible outcomes:

  • The city cuts its losses (so far $180,000) and lets the Thompson be sold to the highest bidder, hoping the new owner has the capital to restore and take care of it.
  • The city demolishes the Thompson, and it likely becomes a parking lot until the end of time.
  • The city steps in and tries to save the Thompson.

“I don’t want to be the guy tearing down one of the most historic places in town,” council member Chad Cummings said,

But, Oberloh pointed out, that might be the best option.

Ten Haken said it’s hard to decide for sure whether to take on a renovation project without knowing how much it’s going to cost. Cummings agreed that he’s uncomfortable deciding before there is a cost estimate and rent estimate.

“Unfortunately,” said Oberloh, “I think doing nothing is not in the cards.”

He asked if, temporarily, the city could just get the building in good shape for the commercial tenants and worry about the rest later, once more information is available.

Council member Amy Ernst also expressed concern about local businesses.

Demolishing the Thompson “would be a big hole in downtown Worthington,” she said, speculating that losing the historic landmark might make neighboring businesses less profitable.

Ten Haken agreed.

“I have heartburn about taking down the Thompson Hotel,” he said. “It’s a lousy alternative.”

Brisson stepped in and reminded the council that the Thompson’s problems are not the city’s fault.

“I don’t want anyone in this room to feel bad about this at all,” he said.

Robinson also asked the council to remember that “the money we put into this can’t be invested in other projects.”

Oberloh thought it would be important to find out from the public if Worthington residents think the city should save the Thompson, knowing it’s their tax dollars that would be paying for it.

Again, Ten Haken pointed out, it’s hard to do that without having an estimated cost.

It would take months to do a thorough study, Robinson said.

“The decision’s not going to wait for us,” he added. Either way, the city has to take a risk. The only question that there is enough information to decide on is whether or not to fix the roof.

Brisson agreed.

“We are not going to come to a decision,” he said. “The decision is going to come to us.”

With an auction looming, the city simply does not have time to get all the information it would want before acting. It is running out of options, and, as Robinson pointed out, “too many of the options end up with the city owning the building.”

Rickers said that if the decision at hand is just about a roof, the city should do it.

“Otherwise, you’re signing a death warrant for a historic building,” he said.

Ultimately, four of five council members agreed. With a roof, the Thompson might be salvageable. Without one, it definitely won’t be.

The council also voted that tenants should not be living in the Thompson’s conditions, agreeing to give residents 90 days to move out but not making a plan for where those people might go.

Since Wednesday, the city’s legal team determined that the city may not have the right to evict tenants without owning the property. The city council will revisit the issue at its regular meeting Monday evening.