Owners of Juneau apartments that were demolished as fire hazard will pay $1.5 million

JUNEAU — The owners of an apartment building that caught fire twice and was demolished after it was declared a public nuisance have agreed to pay $1.5 million to Juneau.

The City and Borough of Juneau announced the settlement last week, ending its litigation to recoup the nearly $1.6 million spent on demolishing the building in January 2016, the Juneau Empire reported.

"This settlement is the end of a long struggle and it creates the path for redevelopment of these downtown properties," city manager Rorie Watt said. "CBJ is glad to put this issue behind us."

The Gastineau Apartments, owned by James and Kathleen Barrett, was damaged in a fire in 2012. The property was condemned and sat vacant for four years. The city declared the building a public nuisance in 2015 and later demolished it. The city then filed a lawsuit in March 2016 against the former owners to collect the demolition costs.

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Lawyers for the Barretts challenged the suit, arguing the city did not have authority to demolish the building. A judge ruled in June that the city was within in its rights, saying the owners did not do everything in their power to appeal the city's public nuisance order.

The settlement did "concede a bit" by falling short of the full demolition cost, but the city now does not need to go through the risks of trial, including any potential appeals, Watt said. The case was scheduled to go to trial next week.

The Barretts will pay the settlement in installments with the entire amount due before the end of December 2020, according to court documents.

The first payment of $100,000 is due within 10 business days, and the next payment of $300,000 is due by August 2019.