MONTAGUE — After hearing estimates in February that could potentially exceed the town’s $10 million budget, the Selectboard signed a $17,250 contract with Tighe & Bond on Monday to create an alternative demolition design for the former Strathmore mill complex at 20 Canal St.

The contract, paid for using part of the $5 million that was allocated to the project by the Massachusetts Department of Conservation and Recreation, allows the town and engineers with Tighe & Bond to explore demolition and redevelopment designs that are more feasible in terms of cost.

“This is the result of some conversations with Tighe & Bond after the initial shocker we received from the alternatives analysis that would’ve had us either reinforcing or building a new Building 9,” Assistant Town Administrator Chris Nolan-Zeller explained, noting that an alternative design would leave the buildings immediately surrounding Building 9 standing.

The original estimates for two demolition design options included a $7 million price tag to demolish 10 buildings at the complex and stabilize Building 9, which houses the privately owned hydroelectric turbine operated by Eagle Creek Renewable Energy. The other option, just to demolish and completely rebuild Building 9, would have cost $10 million — equal to the total amount the town has available for demolition and redevelopment at the 1.3-acre riverfront property.

Montague’s $10 million budget comes from a $4.92 million federal grant from the U.S. Environmental Protection Agency, coupled with the $5 million from DCR. Were the town to spend $10 million specifically on Building 9, it would leave the rest of the derelict complex still to be dealt with. In the wake of various federal cuts, Town Administrator Walter Ramsey noted that the federal grant is still under contract, and no notification to the contrary has been received by the town.

According to the contract with Tighe & Bond, the scope of service the $17,250 would cover includes the site visit; “conceptual plans, elevations and details for the proposed demolition extents” using information gathered at the site visit; and a cost estimate and meeting with the town to see if the design will be accepted. In an interview, Ramsey explained a revised demolition proposal could be available within the next month.

The previously anticipated timeline for demolition in summer 2025 is likely not realistic, with Ramsey saying the “best case” would be to plan for a fall demolition. He said the town is in frequent conversation about its stake in Building 9 as this project continues.

According to Eagle Creek Renewable Energy’s website, the hydroelectric turbine is a 937-kilowatt facility that shares the canal with FirstLight Hydro Generating Co. The turbine produces more than 2 million kilowatt-hours of energy in a typical year.

The Strathmore mill complex is a former paper mill along the Connecticut River that was constructed in 1874 and expanded on through 1970. The mill ceased manufacturing in 1994.

A 2007 fire, determined to be arson, destroyed Building 10 and damaged two other buildings. Montague acquired the site for redevelopment in February 2010, but due to the complex’s deteriorating nature and presence of contaminants in the buildings, the town must demolish it before any work can be done.

Erin-Leigh Hoffman can be reached at ehoffman@recorder.com or 413-930-4231.