The City of Ypsilanti is moving ahead with demolition of the Water Street project site, south of Michigan Avenue and east of downtown.

Several buildings are set to be torn down on the 38-acre site, including an old shopping center and other buildings along Michigan Avenue. The city will be using ECT, the brownfield servicing company first hired during the project's inception in 1999, to oversee the demolition.

ECT's John J. D' Adodoria said the demolition will go through several phases over the next few months, wrapping up by May if all goes as planned.

He said ECT will bid out the project in November, start excavation and asbestos removal in December, and demolish several old buildings between January and March.

The demolition will cost $850,000. Ypsilanti City Planner Richard Murphy said $600,000 will come from three separate federal Environmental Protection Agency grants of $200,000 each, while the remaining $250,000 will come from federal Neighborhood Stabilization funds.

All the buildings are slated for demolition, Murphy said, adding that he isn't certain whether the funding will cover the costs for removing all of them. The shopping center building that once housed a Wrigley's grocery store, and more recently the Huron Trade Center, will be taken down, the city said.

The Water Street project has often been mired in controversy during its decade-long history. The city began redevelopment in the area 1999, using $13 million in bond money to buy and clean up the site for development.

At that time, city officials were hopeful the development would increase home ownership near downtown, increase the tax base, help downtown businesses with an increased customer base, and connect Riverside and Waterworks parks.

The city was caught off guard when tests showed a much higher toxicity level on the land than was first expected. Among the contaminants are lead, petroleum products, and manufacturing materials, D'adadoria said

In 2004, Biltmore - the developer that proposed building around 872 condominiums on the site - dropped out of the project. Another developer, Joseph Freed & Associates, took over but dropped its support for the project in 2006, citing the poor housing economy.

Murphy said the city hopes to sell the more usable tracts of the property once demolition is finished.

"At the moment we're looking for developers to see what we can get," Murphy said. David Wak is a freelance writer for AnnArbor.com.