The old Oamaru Hospital will be demolished to make way for an 82-lot residential development.
The old hospital overlooking the town has been empty since the new hospital was opened in 2000.
The Goodland Group, which has owned the land and buildings on the site since 2004, will start demolition work later this month. It is expected to take at least three months.
Goodland Group senior project manager Hari De Alwis said the redevelopment of the land would begin about August this year at the earliest.
He described what the company was doing as a ‘‘transformation''.
The initial plan was to create sections, but that was open to change depending on what the market wanted.
If houses were wanted as well, the company could alter its plan. Mr De Alwis said when the company first acquired the land the intention was to sell it with the hospital buildings on it, but it had not sold.
‘‘The money we've spent in these buildings in the past, it's just down the drain.''
‘‘Creating this subdivision has already cost $2million and there's no return on it. We're pumping more money to demolish it, then we had to pump in more money to create this subdivision.''
Despite the financial costs, the company was still confident in Oamaru, he said.
The building, which was built in 1872 and added on to in 1964, contained asbestos, Waitaki Mayor Gary Kircher confirmed.
He said it was not clear how much asbestos was in it, but the council had worked out how to contain the hazardous material in the Oamaru landfill and would record the sites where any asbestos was dumped.
Mr Kircher acknowledged some people in the community would be upset at the loss of the buildings, but said the site had been vandalised and that left the company with little choice.
‘‘It's a building that does have a lot of connections with people. They'll be many sad to see it go, but I'm certain it's the only option left.''
