Much like The Scrap Exchange that used to be there, the Liberty Warehouse will also be recycled, reused and remade.

On Monday night, Durham City Council voted unanimously to remove the building’s historic landmark designation, allowing local company Greenfire Development to avoid penalties for failing to rehab the ailing building. The decision also gives builder Roger Perry from East West Partners the OK to proceed with redevelopment plans.

Located near Durham Central Park, the Liberty Warehouse is composed of two rough-on-the-eye buildings. Its charm comes from its history, as the last standing former tobacco auction warehouse in the city. In recent years, local artists and nonprofit arts groups rented space until torrential rains caused part of the roof to collapse in 2011. After the city inspected the building, it was condemned. It has been largely vacant ever since. (Disclosure: INDY Week stores some of its newspapers in part of the warehouse.)

City Council granted Liberty Warehouse local landmark status three years ago after a request by its current owner, Greenfire Development. Such status restricts the improvements that can be made to a building’s structure but it also gives property owners a 50 percent tax break. Now that the status has been removed, Greenfire will have to repay approximately $29,100 of deferred taxes to the city and county, according to Durham County Tax Administration Office estimates.

That amount is far less than the fines Greenfire could have been forced to pay. After the roof collapsed, City-County Planning Department Director Steve Medlin had begun a “demolition by neglect” investigation, but he suspended it several times to give Greenfire more time to make repairs. In February 2012, as INDY Week reported, Medlin was expected to set a new deadline for repairs, and to assess Greenfire a penalty of $500 a day for failure to do so.

Yet since then, Greenfire has done little to fix the building. And even though the company has been issued a Notice of Violation and a civil citation, Greenfire has paid nothing. That’s because according to Durham’s development ordinance, the city can fine a property owner only after a second citation, which Greenfire did not receive, Medlin says.

Additional enforcement actions are in a “stayed” condition pending the outcome of the de-designation request,” Medlin says. Now that the landmark status has been removed, so is the fine.

At the City Council meeting, Perry, who has a contract to buy the Liberty Warehouse from Greenfire, presented his vision for the site: A mixed-use building with about 50,000 square feet of commercial space and 250 homes. “It will not be luxury housing but workforce housing for people working in and around downtown. Rent won’t be extraordinarily high because the units will be small,” Perry says, adding he envisions local businesses will use the new facility.

The structure will contain some parts of the original Liberty Warehouse. Perry told INDY Week he plans to honor the warehouse and its years of history and culture. “We want to preserve the elements of the building, the wall toward Central Park, the northeast corner,” he said. “We’ll also do a public display or a museum of the history of the warehouse.”

Construction is expected to be completed by 2015.

The city negotiated with Preservation Durham, which initially opposed the removal of the historic landmark designation. However, after meeting with Greenfire Development and Roger Perry, the group and the city agreed on a list of preservation initiatives. As a result, Preservation Durham did not oppose the council vote.

Wendy Hillis, Preservation Durham’s executive director, acknowledged that it is a difficult building to rehab. “Our concern has been that any redevelopment project intelligently assesses the historic importance of the site and ensures that any new construction is appropriate within the industrial context of the neighborhood.”

City Council member Eugene Brown stressed that Perry has an excellent track record and that he has access to the capital required for the renovations. The building will generate about $850,000 annually in taxes.

Most Council members seemed relieved that a contractor has expressed interest in the warehouse. Durham Mayor Bill Bell said he initially voted for its landmark status in hopes that would spur Greenfire to renovate the building. “We’ve waited for three years and nothing has happened. My rationale before and my rationale now is to get something done.”

This article appeared in print with the headline “It’s history.”