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The Buffalo Municipal Housing Authority will begin negotiating a $3.5 million construction loan from M&T Bank to continue remediation and demolition plans over the winter at Kensington Heights, this time in accordance with Environmental Protection Agency guidelines.

The authority also moved to secure federal brownfields funding that will complete the entire project by next spring and repay the loan.

Both measures were approved by Housing Authority commissioners Tuesday.

The loan is designed to supplement $3.3 million remaining from a $5 million New York State Dormitory Authority grant that the authority used to remediate and knock down the first two of six asbestos-contaminated buildings on the site.

Under the EPA plan, an additional $5 million to $10 million is needed to complete the project and demolish the other four buildings.

“[The loan] is a great opportunity to deal with gap financing at Kensington Heights and also the problem of delaying work. Work will not stop,” said Housing Authority Board Chairman Michael Seaman.

Built in 1958 on 16 acres on Buffalo’s East Side, Kensington Heights has been vacant since 1980 and has become an eyesore visible to motorists on the nearby Kensington Expressway.

In 2009, Housing Authority executives announced plans to demolish the towers.

But after three years and a string of problems at the site – including lawsuits, criminal indictments and health concerns over asbestos that was improperly handled and remains – demolition work restarted in May with EPA approval.

Since then, one building has been demolished and the soil around it remediated. A second building has been remediated and will be demolished by the end of the year.

“All that remains [of Building 2] is the core,” said Executive Director Dawn E. Sanders-Garrett.

The soil around the perimeter of Building 2 will have to be recleaned after demolition is completed.

With that, Phase 1 of the overall project will be completed on schedule, Housing Authority officials said.

The other four buildings have been fully wrapped in double-ply polyurethane on the outside, covering all windows and doors.

If the construction loan is approved, the additional funding will pay for the demolition of Building 3 over the winter and for work on Building 4.

Also during Tuesday’s meeting, commissioners moved to set up a separate nonprofit corporation in order to participate in the federal government’s brownfields tax credit program.

“This step is necessary for us to qualify for brownfields tax credit,” Seaman said, explaining that housing authorities cannot directly receive the federal funds.

With the tax credits, the authority hopes to complete the Kensington Heights project by next spring and repay the loan.

As for safety measures at the site, Stohl Environmental and the state Department of Labor inspect the work and monitor the air, authority executives said. In addition, Stohl and the main contractor, Aria Corp., conduct building inspections five days a week. Aria provides on-site security from 8 p.m. to 4 a.m. seven days a week. In addition, an 8-foot-high perimeter security fence was installed and is monitored to prevent trespassing.

email: dswilliams@buffnews.com