Seven million added to Armory insurance funds

The City of Aberdeen received a partial insurance payment of $7 million for the loss of the Armory Building that burned down a year ago Sunday, along with the city’s history museum, but it’s still unclear when a final insurance payout will be known, according to Mayor Erik Larson at Tuesday’s meeting for the Board of Museum and History.

The towering fire totaled the inside of most of the historic building that housed not only the museum, but the Aberdeen Senior Center and Coastal Community Action Program, a large social service agency that serves hundreds of clients.

This new $7 million will bring the amount of insurance payout for the Armory Building so far to around $9 million, which is intended to cover up-front costs such as building inspections, cleanup, and now the eventual demolition of the building. Larson says the final payout will be substantially more, and that at this point the city’s insurance company and a third-party insurance professional need to resolve the differences in the building cost estimates and agree on a final amount. There also still needs to be an agreed rebuilding cost, and a determination of value for the museum contents, he said.

“There were so many items in the museum, so figuring out what the actual cash value of all those things is for the purpose of a claim is pretty difficult and time consuming,” said Larson, who added he isn’t sure when a final payout amount will be known, saying it will take months at least.

Parks Director Stacie Barnum has been handling much of the work related to the Armory recovery and said the city is still working to get a value on the museum’s collection, which the city owns.

Larson explained that the $9 million will go into the city’s reserve funds, and said it could technically be used for other purposes in the city if the council wanted. But he said at this point the money isn’t budgeted to be used for any activities except fire recovery, such as demolition and other necessary expenditures in the insurance claim.

“I wouldn’t expect a plan for the funding be made until after the settlement is finalized, so the money will just sit in an account, and may be drawn down for expenditures like demolishing the building,” said Larson. “We don’t have any plans to spend the money. The council could at any time decide, ‘Hey we’ve got this thing we think it’d be good to spend this money on.’ We have the ability to do that, but I don’t foresee that happening anytime soon. Until we know the final amount we have, we probably won’t be spending any large amounts out of that settlement.”

In November the Aberdeen City Council unanimously approved a motion to not preserve any of the Armory Building. In an email, Barnum added the city is working with an outside engineering agency “familiar with large demolition projects like this.” She said the firm hopes to have a draft request for proposal sent to her early next week that will then be sent to the council for approval.