Firm hired to study project overruns

The Spokane Public Facilities District decided Tuesday to hire one of the Convention Center expansion project’s original bidders to provide advice on how to handle cost overruns it’s experiencing with the construction management team that was selected.

KJM and Associates of Spokane will be paid $30,000 for its services, the board decided during its regular meeting. KJM, paired with Garco Construction of Spokane, had made a pitch to land the general contractor/construction management job that was awarded to Bouten Construction of Spokane and Hoffman Construction of Portland, said Kevin Twohig, PFD executive director.

Twohig said KJM is being hired because it has expertise in construction management beyond what exists on the PFD’s staff. Current cost overruns for the $79.4 million project are at $8.7 million. Documentation the contractor has provided to the district says the PFD is responsible for $7.1 million of that, although that’s still being negotiated with the district.

Built into the $55 million construction budget is $2.3 million for cost overruns. However, that still leaves $4.8 million in expenses that are not in the budget, Twohig said.

Among the items that are costing more than expected are excavation of contaminated soil, at more than $1 million; $1.2 million for steel; and $500,000 for the “complexity of promenade details,” according to documents prepared by Hoffman/Bouten. The promenade is a walkway that will connect the 100,000 square foot expansion to the existing Convention Center.

The PFD staff, architects and contractors have been meeting steadily for about a month to resolve the budget problems which surfaced after the largest bid package was opened. The bids came in $6.2 million higher than expected, Dave Garske, operations manager for Hoffman/Bouten said at the time.

Garske said a “portion” of the costs will be the district’s responsibility. For example, anything in the plans that goes beyond the design originally requested is called a “scope” change and falls to the district to pay, Garske has said in past interviews.

“There were dramatic changes in the drawings,” he said after Tuesday’s meeting.

Twohig, however, said the district is “still looking at the same drawings we’ve looked at all along.”

Despite the dispute, all the parties say they’re committed to working together to resolve the problem. Twohig said much of it could be handled by selecting less expensive construction materials, furniture or fixtures. The size or planned utility of the building will not be changed, he said.

The PFD’s finance committee also is looking into whether the $57 million worth of bonds that were sold to pay for construction can earn more interest. “Considering the financial pressure the project is under right now,” it makes sense to look again at whether that money can earn a greater rate of return, Twohig said.

Despite the financial strains, Twohig said construction is still progressing, with other work being completed while the board and the contractor continue negotiations. The electrical work was sent out for bid again due to unclear drawings in the original request for proposals, Garske said. As long as bids for that work come in by year’s end and the work is done by the end of January, Garske said, the project should stay on track. Garske said time could be made up through overtime.

“We’re at the point where we need to get contractors on site. We’re right on, but we’re going to be going negative (in terms of time) pretty quickly,” Garske said during the meeting. The contractor has added staff to manage the schedule and the materials, he said, and to work more closely with subcontractors bidding the project.

“We’re spending a lot of time and effort to solve this problem,” said George Nachtsheim of Integrus Architecture, one of the project architects.

The deadline looming is the 2007 U.S. Figure Skating Championship which Spokane landed in part through the promise of the newly expanded center.

Also Tuesday, the PFD heard a presentation from Spokane Valley dentist Philip Rudy, who has proposed a multi-use building that could be constructed on the block south of the Opera House. That block is bounded by Washington, Main, Bernard and Spokane Falls Boulevard.

The structure would be up to 38 stories high and could include future Convention Center expansion space, retail, residential units, parking and office space. It would connect to the Convention Center via a skywalk.

However, Rudy still is looking for investors to help him purchase the property and finance the project.