7-A – 7-F
Problem Identification:
– The City does not have a demolition strategy tied to an overall redevelopment plan or individual neighborhood plans. In 1995, there were 228 demolitions; in 1996, 552; in 1997, 1087; in 1998, 1754; and in 1999, 996. (There is currently a moratorium on demolitions due to a lack of funding and the need to reevaluate the decision making process for demolitions.) The current backlog of demolitions is unknown, but the estimated number of vacant buildings citywide is in excess of 12,000.- The current demolition contracting process creates a lengthy bid process, and results in cost overruns and inconsistent workmanship. City contracts for both demolition and site preparation services for redevelopment are combined at a substantially higher cost than if these two services were bid separately. The City takes months to award a contract after the bid is submitted.

– The current practice of requiring minority participation statements a week after bids are submitted leads to price comparison among contractors. The lowest bidders then disqualify themselves, leading to unnecessarily high costs to the City.

– The City does not place a high priority on recycling building materials. DPW routinely disposes of building materials from demolished buildings at expensive and irreplaceable landfills rather than recycling the materials.

Recommended Action:

– The City should develop and adopt a formal demolition strategy that is based on:
1) demand for available land for redevelopment;
2) individual neighborhood strategies.

– The City should develop an emergency demolition standard. If individual neighborhood plans do not include a demolition component or if there is no redevelopment plan, buildings should not be demolished unless their continued presence poses a health and safety danger to the community.

– The City should establish an annual demolition target. In order to increase the cost effectiveness of demolition, buildings should be demolished in groups, such as whole blocks (or ‘assemblages’) at one time.

– The City should award separate contracts for demolition and site preparation for redevelopment.

– In FY 2001, HCD should consider implementing a Job Order Contracting (JOC) program similar to that successfully used by HABC ($91 million), based on recommendations of the Gordian Group, a consulting group hired by HABC (and approved by HCD) to develop and implement its JOC program. The JOC process expands the number of competitive bidders and reduces the amount of time (and money) spent administering the bidding process.

– Contracts for demolitions should be awarded within 30 days of bid submittal.

– Institute recycling for all City demolition work, including emergency work.

Cost Savings, Organizational, Service Improvement

Function/Operational Area:
HCD-Neighborhood Revitalization, Acquisitions and Disposition and Construction and Building Inspection

Estimated Annual Impact:
Savings of 6 – 20 percent per year on demolition costs if JOC program implemented. Savings of 75 percent for disposal costs. (See attached analysis.)

Estimated Implementation Costs:

Barriers to Implementation:
Possible resistance from existing demolition contractors (including minority business enterprises) and elected officials who support them.

Projected Implementation:
90 – 180 days

Next Steps:
In concert with the acquisitions/disposition recommendation, determine areas of the City where there are vacant buildings in demand. Complete the acquisitions process in those areas. Determine source of funds for demolition.



The costs to implement the proposed recommendations would be negligible.


1) Through Job Order Contracting (JOC), HCD would save an average of 13% (6% to 20%) of current demolition costs.

$10,000 per demolition X .13= $ 1,300 per demolition

To demolish 1,000 units, the savings would be:

1,000 X $1,300 $1,300,000

2) Currently, demolitions can take between 6 to 12 months because of contractor delays. These delays often result in increased costs to the City due to vandalism and damage to neighboring structures. Instituting Job Order Contracting would enable the City to hire contractors who would adhere to a set schedule for the most reasonable price, which could decrease average demolition time to 3 to 6 weeks. At this time, it is impossible to quantify the amount of monetary savings that implementing this system would generate, but savings would probably be considerable.

3) To implement Job Order Contracting (JOC), the city would decrease the number of Notices of Letting (NOLs) it would have to issue. Under the current system, the city must issue a NOL incrementally, or every time it wishes to do a small block of demolitions. Thus, if the city wanted to demolish a block of 50 units at a time, it would have to issue an NOL every time it wanted to demolish a group of units. Over an annual period, the City might have to issue 30 NOLs for 1,500 demolitions. Under JOC, the City could issue one NOL for all of its future work in one particular area. For instance, the City could issue one NOL for all of its demolition work, one for all of the debris removal, and one for repairs or stabilization of neighboring structures.

Cost of issuing an NOL: $5,000
Cost of issuing NOLs under current system for 1,000 demolitions:
(1,000 50) X $5,000= $100,000

Cost of issuing NOLs (one each for demolition, debris removal, and repairs/stabilization) under JOC system for 1,000 demolitions:

3 X $5,000 = $15,000

Potential savings: $100,000 – $15,000 $85,000

4) The cost of disposing of waste generated through demolition at sanitary landfills is currently $40 per ton. By recycling the materials at $10 per ton, the savings on 1,000 demolitions would be as follows:

Average price for disposing of waste in sanitary landfill
(based on average cost demolition after JOC is implemented)

– Recycling:
10% of demolition price =
$10,000 – 13% = $8,700 X 10% = $870

– Landfill:
Demolition price using sanitary landfill =
$870 X 4 = $3,480

– Savings per demolition =
3,480 – $870 = $2,610 X 1,000 demolitions = $2,610,000

Potential net benefits to HCD (per 1,000 demolitions)$3,995,000