On what city officials declared was a “red letter day,” Dowagiac City Council has taken the final step toward the demolition of the vacant “old grey” building at 200 E. Division St.

Council voted Monday to approve a contract with Melching, Inc., of Nunica, Michigan, for the demolition work of the former Round Oak Company warehouse located near the railroad tracks downtown. The company was one of nine companies that bid on the project, coming in with the lowest estimate of $392,000.

The selection of a demolition company marks the conclusion of the action council has taken in recent months to bring down the abandoned warehouse, which the city acquired in May. The building, which has not been occupied for a number of years, has fallen into disrepair, and presents a public safety hazard, city officials say.

“It is a red letter day,” Anderson said. “This is something that we have talked about off and on for a number of years. We worked to originally get developers for the property, but it’s just too extensive of a project — it’s too costly.”

Bids from both Melching and Salenbien Trucking & Excavating, Inc., of Dundee, Michigan, came in at under $400,000. The two proposals were forwarded to local surveying and engineering firm Wightman and Associates for further review; the company recommended Melching for the work, due to the fact it was the lowest the bidder, had an outstanding reference and could perform its own asbestos abatement work.

With the city originally estimating the project to cost half a million or more, Melching’s estimate has come as quite a pleasant surprise to council, Anderson said.

“Based on what we had anticipated and what we expected to spend, this is quite a windfall,” said Mayor Don Lyons.

The city will also be receiving $250,000 in grant funding from the state’s Blight Elimination Program, which will further reduce the amount the city will have to fork over for the demolition.

In addition to paying for the actual razing of the structure, the city’s investment will also cover clean up of the site, as well as the planting of grass seed at the lot.

“The contractor said that if we take action tonight, they expect to be out of here by the end of the year, weather permitting,” Anderson said.