Large-scale, city-sponsored downtown improvement projects were riddled with delays, change orders and contract squabbles before they were completed earlier this year, according to city officials.
However, even though the largest of these projects—the four-story downtown garage—cost about $302,000 more than budgeted, the “downtown placemaking” efforts collectively cost less than the amount previously authorized by the five-member city council.
City staff presented reports on the final costs of the garage, Monterey Road streetscape and downtown utility undergrounding projects to the council at their Sept. 7 meeting.
The items were on the meeting’s consent calendar before the meeting, but Councilman Gordon Siebert pulled the garage approval for discussion. He sought an explanation from city staff how the council could legally approve the extra cost after the project was completed.
After Siebert was assured that the action complies with the law, the council accepted the project, which ended up costing about $11.2 million, on a unanimous 5-0 vote.
The Monterey Road streetscape and utility undergrounding were also unanimously approved, without discussion, at a final cost of about $2.1 million and $2.2 million, respectively. The council previously authorized about $2.5 million for Monterey Road and about $2.3 million for utility undergrounding. These savings will be used to pay for the cost overrun on the garage project, according to city staff.
The robust downtown makeover—with a total budget of $25 million—also included street resurfacing, public art expenses, assistance for private developers (with the Granada Theater, former Downtown Mall, former BookSmart center and former Simple Beverages site) and three new downtown parks that are in the design phase. Plans for these former RDA-owned properties—which are already approved and under construction—include the Granada Hotel and renovated theater, new restaurants, as well as residential, retail and commercial spaces.
“We have a beautiful downtown, and the direction the city is going in, (which) started eight years ago, has now come to fruition,” Siebert said. “Now we’re going to see the tremendous efforts of private developers in the downtown. I’m very pleased.”
Elevator holds up parking structure
The four-story, 270-space downtown garage project was contracted in December 2014 with F&H Construction for about $8.75 million, including a contingency fund. In May 2015, the council approved a $2.2 million change order to add the reconstruction of East Third and Fourth streets to the same contract. In the ensuing months of construction, the project was delayed by some of the 16 additional change orders that added about another $472,000 to the total cost.
Construction of the garage started January 2015, and the facility along with the street reconstruction were complete by May 2016. The garage was initially expected to be complete by the end of 2015.
The contractor’s inability to work on the structure foundation and wall panels due to the proximity of a PG&E transformer at the southeast corner of the property helped delay the project; state labor safety rules prohibited construction work so close to the transformer, according to city staff. Furthermore, F&H was unable to obtain state approval and certification for the garage’s elevator for some time after the rest of the structure was complete.
Other costly change orders include replacing an asphalt road section on Third Street with colored concrete, and overtime and weekend work by F&H employees and subcontractors in order to accelerate the project, according to city staff.
The total cost of the change orders ($2.6 million, including Third and Fourth streets) was arrived at by an agreement between the city and F&H, the city staff report says. “As part of this (agreement), city staff agreed to not recommend charging liquidated damages to the contractor for the elevator delay,” the staff report explains.
‘Magnitude’ contributed to disputes
The city’s biggest savings among these projects was the Monterey Road streetscape, which ended up costing about $385,000 less than the council authorized. This project included upgrades to the street’s irrigation, electrical, gathering space and landscaping, as well as new parking benches, lighting and pedestrian safety features.
The savings come despite 12 total change orders during about 12 months of construction, and “multiple construction disputes” with contractor Stockbridge General Contracting. The city and contractor agreed to settle these disputes at a cost of $165,000 to the city, according to city staff.
Specifically, Monterey Road streetscape change orders included the installation of four new planter benches at Fifth Street and Monterey ($34,000); removal of asphalt for a downtown car show ($4,960); removing previously installed stormwater measures due to an event in April 2016 ($361); and the installation of 70 drip irrigation devices at new tree wells ($9,795).
The downtown utility undergrounding project saw nine change orders that cost a total of about $350,000, according to city staff. Still, that project was completed this summer at about $81,000 less than the council’s authorized budget of about $2.3 million.
The undergrounding project placed overhead utility lines on East First, Second and Fourth streets underground, and installed new streetlights.
City Manager Steve Rymer said the complexities of having several downtown projects going at once contributed to the change orders, delays and disputes.
“With the scope and magnitude of these projects, items do come up during construction that the city and our contractors need to resolve,” Rymer said. “We successfully accomplished that and are proud of the fact that the council has now accepted all of the projects.”
The council and city officials have been working on the $25 million downtown revitalization effort since before the Redevelopment Agency was shuttered by the state in 2011. The funding for the multi-project effort came from bond proceeds left over from the RDA when it was forced into dissolution.
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Fourth Street Garage: $11.2 million ($10.9 million budgeted)
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Monterey Road streetscape: $2.1 million ($2.5 million budgeted)
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Utility undergrounding: $2.2 million ($2.3 million budgeted)
