LAWRENCE — The city appears to have met the deadline for spending a state grant to remove asbestos and tear down buildings on Merrimack Street to make way for a private development owned by restaurateur and real estate developer Sal Lupoli.

While the work hasn't actually been done, it has been "encumbered," said Michael Sweeney, head of the Planning Department in Lawrence.

"The physical work hasn't been done, but we've met the regulatory requirements," Sweeney said.

In March, the secretary of the Executive Office of Housing and Economic Development came to Lawrence to announce a $2 million grant for the city, which would then be used to do infrastructure work on Lupoli's property, including removing asbestos and demolishing buildings.

Lupoli plans on building a retail complex, office building, and public park and boathouse on the property. However, that work was delayed for months after a series of challenges over how the project was put out to bid.

Economic Development Director Tom Schiavone said the city scrambled to make up for lost time, and made sure that most of the money was at least committed to contractors by the deadline — which was Tuesday at 5 p.m. — the end of the 2009 fiscal year.

If the money hadn't been used by the deadline, the state could have possibly taken it back.

Kofi Jones, spokeswoman for Greg Bialecki, secretary of the state Executive Office of Housing and Economic Development, said the agency has confirmed that "all the work was done as per the contract."

She said the city actually has until July 15 to turn in all the invoices and receipts for the project, which will offer final proof that the money was spent correctly.

"The city has said they have spent all the funds," she said.

Sweeney said the money was spent in three main areas: $200,000 was paid to TEC engineering, a Lawrence company; $775,000 was for 'emergency work' to provide asbestos abatement, demolition and backfill of the so-called boiler room, which includes two, 100-foot smokestacks; and another $924,000 has been pledged toward abatement, demolition and backfill of several buildings around the boiler room.

Schiavone said S&R Contracting of Lowell is doing the abatement and demolition work.

"The contractor did a lot of work last week and caught up," he said.

Sweeney said any money left over from the original $2 million grant will be spent by the end of fiscal year 2010, which also complies with provisions of the grant.

Jones said $1.2 million was to have been spent in 2009, and another $800,000 by the end of 2010.

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