Little Rock’s 12th Street Police Station has been in the planning stages for more than three years, but recent contract negotiations have bumped up the price and raised concerns from several city directors.
A contract revision scheduled to come before the Little Rock Board of Directors on Tuesday would raise the price of the project to almost $12.5 million, including contingency funds and adding a construction manager fee of about $453,000 for East-Harding Adevco LLC. Several directors said the price - an increase of more than $2 million from original estimates - is not an acceptable way to move forward with the long-awaited project.
“I’m not sure it’s a good decision to start our first big project from the sales-tax funding that percentage over budget,” Ward 3 Director Stacy Hurst said. “I just don’t know that I’m willing to set that kind of precedent.”
Hurst said she supports the project as a whole but has concerns about the contract and construction process, as well as the overall price. Other directors said they were concerned that the extra cost would drain funding from other sales-tax projects.
The substation is the first major project funded entirely by the 2011 citywide sales-tax increase approved by voters.
The city has completed two other projects, the west Little Rock Fire Station on Rahling Road and the Adult Leisure Center on West 12th Street, with some sales-tax funding. The fire station was built using some grant money, and the leisure center was built partly with insurance money because the former center was destroyed in a fire.
City Manager Bruce Moore said several factors contributed to the bump in price, including inflation in construction costs from the time the building was designed to the time a contractor was hired. He also noted that construction estimates are often inexact.
“When we started planning this building in 2010 and presented estimates in 2011, we were coming out of a recession - and certainly the construction market has changed,” he said. “More importantly, though, we compared the costs to that of other buildings we had worked on, and those costs are just estimates until a contract goes out to bid.”
Moore said all public-safety construction projects were moved up on the city’s priority list for funding from the capital improvement portion of the tax, which will sunset in 2021. He said if the city waited to build the projects until enough money accumulated in each of the construction funds, they might not be built for another eight years and the prices could be even higher then.
At-Large City Director Joan Adcock said she’d like to see costs contained for the 12th Street Police Station, perhaps by eliminating the building’s mixed-use plans. The design, which was set after a collaborative process with residents, calls for retail space to potentially address the area’s need for certain businesses, such as banks.
“I would really like to see the retail part of the building removed from the plan to get rid of some of the cost,” Adcock said. “I don’t think that retail properties should be inside of a city building like this.”
During the Board of Directors’ meeting Tuesday, Ward 4 City Director Brad Cazort pointed out that other police stations across the country have featured similar designs to incorporate themselves into the community. He cited a Houston police station that has a McDonald’s restaurant built into the first floor.
City Attorney Tom Carpenter said in previous conversations and at the Tuesday meeting that the mixed-use plan would work with federal regulations.
The substation is being built using short-term financed bonds that will be paid back in about five years. When the station is finished, the city plans to move the Little Rock Police Department Headquarters into the 12th Street Police Station while the current headquarters is rebuilt on East Markham Street.
With construction time and the temporary housing of other police functions, retailers wouldn’t have space in the building for at least five years.
Ward 2 City Director Ken Richardson, who has spearheaded the 12th Street Corridor planning process, said the space designated for retailers in the current design isn’t overly specific.
“There seems to be some misinformation about the build-out and how that would contribute to the cost,” he said. “It’s a plan for future mixed use. There’s nobody signed on to move in, and the building isn’t designed for specific business types. The space can be used for almost anything the way it’s designed now.”
Hurst also raised concerns about the bidding process.
The city is using a construction manager contract for the first time. Several other government agencies have used such a contract, including the University of Arkansas at Little Rock, the Little Rock School District and the Central Arkansas Library System.
The construction manager contract allows the city to hire an architect and a construction manager who will also serve as the main contractor at the same time so they can work closely to design and build a project at minimal cost. The construction manager is chosen through a qualifications process instead of a bid process, meaning there is not a formal cost bid on the project.
The construction manager would then be in charge of bidding out subcontract jobs such as glass and electrical work, using the city’s bid procedures.
“It’s really a much more beneficial process to have experts working through some of the pieces than to have, say, the city attorney calling and asking,” Carpenter said.
Previous bid processes have hired an architect to design the building, then hired a general contractor through cost bidding.
Moore said the magnitude of the substation project led industry workers to suggest using the construction manager format. He said the largest benefit is the incentive to stay on budget and deliver the project on time.
However, the 12th Street substation took on a hybrid form. The design was started so long ago as part of the corridor plan that there was not much collaboration between the construction manager and the architect, leaving some to wonder if the process was right for this project.
“In my opinion, the fact that we were not able to follow a true construction manager process - because we cannot have it designed under that umbrella - that added to the cost as well,” Hurst said. “If we can’t participate in a true construction manager process, then is this the right process for this project?”
Richardson said the project is important for the community, and he hopes the Board of Directors can move forward.
“In light of what’s transpired, I think it’s in our best interest to move forward with this project and any others already using the construction manager form of contract,” he said. “But I think it would be a good idea for the board to discuss whether this is the best process for projects moving forward.”
Arkansas, Pages 9 on 06/15/2013