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Item 1.C.
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| Date: | 08/26/2024 |
| Title: | New City Hall Construction Manager at Risk (CMAR) Contract - Historic Tax Credit Change Order (CO #5) |
| Presented by: | Jessica Fust, Building Official |
| Department: | City Hall Administration |
| Presentation: | No |
| Legal Review: | Yes |
| Project Number: | N/A |
RECOMMENDATION
Staff recommends approving New City Hall Construction Manager at Risk (CMAR) Contract - Change Order No. 5 agreement with Dick Anderson Construction to increase the Guaranteed Maximum Price (GMP) by $1,125,821.69, and change the substantial completion date to April 1, 2025.
BACKGROUND (Consistency with Adopted Plans and Policies, if applicable)
The CMAR contract for New City Hall was originally executed on April 19, 2022, with Dick Anderson Construction, for construction of the New City Hall located at 316 N. 26th Street. City Council directed staff to pursue historic tax credits (HTCs) for the building as a funding source for the build-out of the project. Given the value of the construction project, the estimated gross revenue from the sale of the tax credits is $7,987,071. Consultant and legal fees will be deducted from this amount, currently estimated at about $1.5M, for a net value of around $6.5M.
As part of the HTC process, the National Park Service (NPS) reviewed our Part 2 application, which includes the project plans and details the items that are being retained, modified, or added to the building. During their review, the NPS noted construction items that they required to be revised to meet their historic standards. These changes included:
· Preserving and rehabilitating the original terrazzo in the elevator lobbies on the first and fifth floors
· Removing the wood ceilings in the elevator lobbies on floors 1, 2, 4, and 5, and installing ceilings that are similar to the original design
· Moving the main entrance vestibule on the East elevation to align with the original design
These changes are outside the current scope of Dick Anderson's contract, and would lead to additional work, such as removing finishes and fixtures that were already installed and relocating the Finance Department's front counter.
If these changes to the project are not made, the NPS likely will not award the City the tax credits at the completion of the project.
As part of the HTC process, the National Park Service (NPS) reviewed our Part 2 application, which includes the project plans and details the items that are being retained, modified, or added to the building. During their review, the NPS noted construction items that they required to be revised to meet their historic standards. These changes included:
· Preserving and rehabilitating the original terrazzo in the elevator lobbies on the first and fifth floors
· Removing the wood ceilings in the elevator lobbies on floors 1, 2, 4, and 5, and installing ceilings that are similar to the original design
· Moving the main entrance vestibule on the East elevation to align with the original design
These changes are outside the current scope of Dick Anderson's contract, and would lead to additional work, such as removing finishes and fixtures that were already installed and relocating the Finance Department's front counter.
If these changes to the project are not made, the NPS likely will not award the City the tax credits at the completion of the project.
ALTERNATIVES
City Council may:
- Approve; or,
- Not Approve and provide further direction to staff
FISCAL EFFECTS
New City Hall Construction Costs:
Original Contract: $22,033,209.07
Previous Approved Change Orders: $2,857,284.96
Current Change Order (CO5): $1,125,821.69
New GMP: $26,016,315.72
The City expects to net around $6.5M from selling Historic Tax Credits for this project. The costs for these changes will be covered by additional short-term financing for the project. If Council does not approve this change order, the Historic Tax Credit funds may not be realized and additional borrowing for the difference will be needed.
Original Contract: $22,033,209.07
Previous Approved Change Orders: $2,857,284.96
Current Change Order (CO5): $1,125,821.69
New GMP: $26,016,315.72
The City expects to net around $6.5M from selling Historic Tax Credits for this project. The costs for these changes will be covered by additional short-term financing for the project. If Council does not approve this change order, the Historic Tax Credit funds may not be realized and additional borrowing for the difference will be needed.