William Westhoven

@WWesthoven

The $34 million state contract for demolition and site restoration of Greystone Park Psychiatric Hospital in Parsippany has been awarded to a New York-based environmental remediation company with offices in East Hanover.

The winning bid from Northstar Contracting Group came in at $34,475,000, significantly less than the estimated $50 million the New Jersey Department of Treasury estimated it would cost to bring down the historic Kirkbride Building and other structures on the remaining 145 acres of the campus, which crosses into Denville and borders Morris Plains.

The state announced the award on Monday and issued a Notice to Proceed for the project to begin on Thursday, according to Joseph Perone, director of communications for the New Jersey Department of Treasury. The project is expected to be completed in 18 months.

“We relied on a state-hired engineer-environmental consultant to obtain a more precise estimate of the project costs,” Perone said. “A robust competitive bidding process helped to save taxpayers money.

The contract includes a Liquidated Damages Clause for late completion, Perone said.

Once a state-of-the art facility for the treatment of the mentally ill in the late 19th century, the massive Kirkbride building has fallen into dangerous disrepair. Historic preservation groups across New Jersey and the United States have urged the state to preserve all or part of the Kirkbride, but DOT dismissed six formal expressions of interest it received from developers hoping to renovate it for housing, community or mixed use.

Gov. Chris Christie confirmed two weeks ago at a Parsippany press conference that the state would not consider a last-minute bid from Alma Realty, which said it could fund the entire restoration, save the building and save the state the hefty cost of demolition and remediation of hazards including asbestos, mold and lead paint.

The DOT website lists Northstar as the recipient of the award, but listed the bid as coming from LVI Demolition Services, Inc. According to the LVI website, LVI Services Inc. and NCM Group Holdings LLC agreed on April 24 to merge, forming NorthStar Group Holdings LLC.

With combined annual gross revenues approaching $600 million and nearly 50 offices nationwide, the merged group claims to be largest demolition and environmental remediation company in the United States.

LVI, with offices in East Hanover, was awarded a $693,738 bid in 2011 to remove the four-story, Morris County-owned Washington Building at the corner of Washington Street and Schuyler Place.

The company’s bid to demolish Greystone was broken down into two amounts — $29,953,983 for the primary work and an additional $1,112,983 for what Perone described as “certain additional removal and disposal of the foundation of the main building and underground tunnels that were used to transport patients.”

LVI’s bid was far lower than competing bids from NASDI LLC ($51,754,250), the Gramercy Group Inc. ($39,589,000) and S&R Corp. ($39,203,818).

State campaign contribution records show LVI has contributed modest amounts of money to candidates and committees representing both Democrats and Republicans.

Calls to the LVI office in East Hanover were not immediately returned.

Staff Writer William Westhoven: 973-428-6627; wwesthoven@dailyrecord.com.