Demolition of former Fun F/X building delayed, as owner seeks damages from South Bend

SOUTH BEND — South Bend leaders have deemed the former Fun F/X building, the site of a massive fire in 2019, unsafe under Indiana law and plan to demolish the crumbling brick remnants. But plans were further delayed this week by a bidder's calculation error as the building's owner continues to seek damages from the city in a lawsuit.

The $553,800 bid from Green Demolition Contractors was to be approved Tuesday by the South Bend Board of Public Works. But a miscalculation by the company overestimated the percentage of minority- and women-owned businesses that would participate, senior project engineer Zach Hurst said. The corrected numbers didn't meet the goals established by city ordinance.

The next lowest bidder was asking for an additional $275,000 to do the job, Hurst said. The city will instead request more bids and seek to approve the demolition at a future meeting. Because the board meets twice a month, the delay is likely to last one to two months.

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The former Halloween supply warehouse at 1000 W. Sample St. is owned by Victor Cao, 57, who founded Fun F/X in 1989. He bought the Sample Street property in 1999 and had just moved all of his inventory out of a store on Grape Road when the fire erupted in July 2019.

Store owner claims South Bend is liable for fire

After the fire, Cao filed multiple ongoing lawsuits against Legacy Fire Protection Services and the city of South Bend.

A federal court ruling last February held that Frankenmuth Mutual Insurance Company owed nothing to Cao because he knew about an issue with the building's sprinkler system and failed to report it to his insurer. Cao requested a $7 million payout, claiming the fire destroyed the building and almost everything inside.

Cao is suing the city with the allegation that a South Bend employee in April 2017 errantly cut and capped the pipe that supplied the building's sprinkler system. An inspection later that year revealed the sprinklers had no water pressure. The issue was unresolved by the time of the 2019 fire.

"I lost everything," Cao said in a phone interview Wednesday. "It's one of those situations where you just keep hoping that the nightmare will end soon so you can just move on and rebuild, but it's been over four years now."

The city doesn't comment on pending litigation. But Caleb Bauer, executive director of community investment, said that once the city pays for the demolition, it would impose a tax lien on Cao to reimburse taxpayers.

Bauer said the city hopes to take ownership of the property at a future St. Joseph County tax sale.

Cao said he couldn't afford to pay for a demolition above $500,000 unless he won his lawsuit against the city. But he wants to see the building torn down.

"I don't want to see anyone there getting hurt," Cao said. "It's a reminder of a nightmare for me."

Email South Bend Tribune city reporter Jordan Smith at JTsmith@gannett.com. Follow him on X: @jordantsmith09

This article originally appeared on South Bend Tribune: South Bend Fun F/X building set for demolition after massive 2019 fire