Three and a half years after a spectacular fire destroyed a wooden building at the University of Hawaii Lab School, UH received its final insurance payment of $2.6 million.

The building will not be replaced, but a new and larger structure housing the College of Education will go up in its place if enough money can be found for construction.

“;It doesn't make sense for us to build a one-story building again,”; said Kathy Cutshaw, UH-Manoa vice chancellor for administration.

Insurer AIG paid a total of about $7.5 million to the university, Cutshaw said.

The final payment is an estimate of what it would cost to rebuild the same 20,000-square-foot structure up to modern codes, she said.

The other payments covered cleanup, replacement of contents, relocation and other costs of the fire.

The insurance company also covered the cost of acquiring and installing four new portable classrooms, which now house offices and classrooms destroyed in the fire.

The wooden building destroyed in the June 13, 2006, blaze was built in 1939 and housed classrooms and offices for the public charter school's physical education, drama and music programs as well as offices for researchers at the College of Education.

The UH Board of Regents approved the insurance settlement last week.

Cutshaw said the $2.6 million will go toward upgrading sewer, water and other infrastructure on the Lab School campus.

UH hopes to tear down two other 1940s-era wooden buildings and replace them with a multistory $49.5 million College of Education building on the site where the building that burned down and the other wooden structures now sit.

Infrastructure improvements are needed should the money become available for the new education building, she said.

The fire was determined to be the result of arson.

No suspects have been caught.