His dysfunctions are distracting you from your overall goal and vision for your business.
He is not an asset to your company and alienates clients.
Looking at it from a purely business decision, I would fire him in a hot minute.
And look for someone who has the skills to help you grow your business.
Your business is yours to manage. what is your perspective from a purely management position, whose eye is on the bottom line and growth of the business?
Dealing with his personal liabilities is not your place.
It isn't hard to fire someone.
You simply tell him that his services are no longer needed and from what you write, stick around as he packs up his things so he does not steal yours.
If he won't leave you can have the police escort him out...just call them.
No conversation with him is going to fix this matter.