Altoona Hotel fire case heads to grand jury

The case of the fire that destroyed the Altoona Hotel 18 months ago has gone to a federal grand jury, according to the owner’s lawyer, while the charred hulk remains a neighborhood hazard the city is looking for a responsible party to remove.

The fire is suspicious, but owner Bjorn Reed is not a target of the grand jury investigation – nor has he been identified as a “subject” or even a “person of interest,” according to lawyer Bob Donaldson.

Reed, however, has been under order from the city since April to demolish the ruins, which are in danger of collapse, according to city fire inspector Tim Hughes.

“It poses a real risk,” said Hughes, explaining that the end walls could topple in a windstorm and the front wall could end up on Fifth Avenue.

“Someone is going to get hurt,” Hughes said, adding that children have been playing nearby – as evidenced by a skateboard ramp in the back.

On Tuesday, the City Planning Commission declared the property blighted, which will enable the city to spend federal Community Development Block Grant money from the blighted property demolition program to pay the city’s demolition crew to “safeguard” the site.

But the commission didn’t authorize spending those funds for demolition, which would cost about $37,000 – or possibly almost three times that amount, if all the rubble is ruled to be contaminated with asbestos – because that would mean less demolition money for other properties with the remainder of the $314,000 budgeted this fiscal year.

“I’d hate to see us pay,” said commission member Jennifer Mikolajczyk.

The city code supervisor last week instructed an officer to cite Reed for failure to remove the ruins, 45 days having elapsed since Reed received the order to demolish.

For much of the time since the fire, Reed didn’t have permission to disturb the property because the federal Bureau of Alcohol, Tobacco, Firearms and Explosives and Mutual Benefit Insurance Co. were still gathering evidence.

Both are still investigating, but both have obtained the evidence they needed from the site and have released it to Reed, according to officials.

It’s not clear, however, that Reed has the money to pay for the demolition, unless and until Mutual Benefit pays the claim.

City officials suspect he lacks the funds.

Robertson said he doesn’t know.

Asked whether Mutual Benefit intends to pay the claim, company lawyer Todd Narvol said, “It’s Mutual Benefit’s policy not to comment on open investigations or open claims like this.”

Neighbors are unhappy about the continued presence of the ruins in their midst, according to city Planning Director Lee Slusser.

“I can see it out my kitchen window,” said Richard Fiore, who lives down the street.

“It’s an Altoona landmark: I would have liked to see it reconstructed,” Fiore said. “But at this point, it just needs torn down, and the lot needs to be made safe.”

Mutual Benefit previously hired a company to install portable perimeter fencing, but the rental has ended and the company that supplied the fencing has removed it, planning officials said.

The insurance company should pay to remove the ruins, even if might prefer to wait for the bureau to rule on whether the owner was “involved,” according to commission member Randy Isenberg, former city fire marshal.

The city should “lean” on both organizations, Isenberg said.

If it turns out that the insurance company doesn’t need to pay the claim, the company can sue the owner for the demolition costs, Isenberg said.

The bureau is waiting for lab analysis results before ruling on the fire, said agent Steve Bartholomew, who declined to estimate how long it would take.

By state law, incorporated in a city ordinance, insurance companies that pay fire claims exceeding a designated amount must put a share in escrow for the municipality to use for demolition and other matters, according to city solicitor Larry Clapper.

Asked whether Mutual Benefit fears it may have liability if someone gets hurt at the site, if the company later learns that it’s responsible to pay the claim to Reed, Narvol simply repeated his earlier statements.

Maybe the city demolition crew can push the walls in to mitigate the danger until the issues are sorted out, Isenberg suggested.

Reed had 45 days to comply with the initial April 24 demolition order, according to Plouse.

If Reed continues not to comply, the city can cite him weekly, and after five weeks, the case could rise to a misdemeanor criminal level, Plouse said.

Donaldson is planning to talk to Reed about the case this weekend.

“We’ll come up with a game plan,” he said.

Mirror Staff Writer William Kibler is at 949-7038