Gainesville Daily Register

May 3, 2013

Developer tries to save city building

By GREG RUSSELL, Register Staff Writer

Gainesville — Property on O’Neal Street in Gainesville, formerly a longstanding home of the city’s hospital and officially declared a nuisance in recent months, stands to be razed.

But its recovery may come from a development team, now ordered to post a $1.5 million bond and provide resources to turn the former Gainesville Memorial Hospital building into a facility that meets city compliance.

The plan of Dallas-based Modern Sustainable Life to provide the city with a 99-bed assisted living facility at 1410 O’Neal St. will be formally heard again on May 23, when the Gainesville Building and Standards Commission meets and is — or is not — presented with proof of the bond.

“All I need is the right coordination with city leaders,” said Tom Kristof of Modern Sustainable Life.

But under the terms of the commission’s most recent order, if no bond is given, the city will begin demolition on the building 31 days after the meeting.

“A demolition has not been technically ordered,” Gainesville Community Services Director John Noblitt said Thursday.

The proposed facility has been in flux since 2010. Kristof, a finance and software specialist, explained Thursday he did not begin as the project’s developer; he said his “passive investment” in the O’Neal Street property began in 2007.

His initial interest, he said, was in seeing an assisted living center developed in light of observing elder relatives suffer from quality-of-care issues.

He invested funds in a separate company that held ownership and he said he intended to watch them successfully create a new center in Gainesville that provided service and jobs.

“I didn’t know I was going to be thrown into the fire,” he said. “It appears that the lease that was signed was never valid, or the company went out of business.”

A Register story from 2008 explained that half of the old hospital building had entered foreclosure while the other multi-level half was sold in November 2005, for $300,000.

The foreclosed half had evidently been owned by Investors Equity Group. The official sale followed the building’s official vacancy earlier during 2005, when the new North Texas Medical Center entered full operation on Highway 82 in Gainesville.

Kristof’s stake in the property became “a full-time job” in 2010.

During that year, he met with Gainesville City Council and discussed development possibilities for the old hospital building, such as a media center or another medical facility not necessarily used for assisted living.

At that point, the project went into a freeze as Kristof, the new owner, delved into research on development, capital and architecture.

“I had to figure out what it would take to run it,” he said. “I had to run a market study and do a business plan.”

Once it was originally vacated in 2005, the old hospital building served some public use; it was briefly made available as a shelter to Hurricane Katrina evacuees.

But in following years, it has reportedly become a squatter’s haven — entered and occupied at random — and a city demolition proposes to solve this very problem.

“Our intent is to cleanly remove a public nuisance if necessary,” Noblitt said.

But Kristof said Thursday he maintains hope toward fruition.

He explained that if the bond is posted and the project proceeds, the contracted Horizon Power Systems will “bring engineers to town” and the assisted living facility may proceed at some date in the near future, a date still undetermined.

“I’m going to have to walk this out through faith, and faith in business,” he said.

And Kristof added that he understands the city’s position and the inclination from officials to remove the old hospital building and change what some have seen as a stagnant, hazardous landscape.

“Gainesville is a good place and I’m not trying to buck the system,” he said. “I’m just trying to make the needs known and bring the right people together. We have good land, good people and a good building can be renovated.”