La Crosse accepted bids for the Grand River Station project before drawings were complete, and city officials are now prepping for a fight over who will pay for unexpected costs.
“The project is now out of line with its budget, and people are going to want to know who’s going to be responsible for this,” said Alderman Richard Swantz. “I know there will be some feelings at the council level, at least, that the city shouldn’t be held responsible for it.”
The downtown La Crosse Grand River project is a partnership between the city and Oregon-based Gorman & Co. Inc. La Crosse will use the building as a bus depot, and Gorman will develop housing inside the structure.
The city awarded the exterior portion of the project last year to Eau Claire-based Market & Johnson Inc., which submitted a low bid of about $20.6 million. But the project generated additional costs since construction began, said Tony Hutchens, assistant director of the city’s Department of Public Works.
Hutchens said incomplete architectural drawings from Minneapolis-based LSA Design Inc. led to discrepancies between mechanical and structural plans and uncertainty on issues such as how to hang brick on the building’s exterior.
John Sponsel, an LSA architect on the project, did not return calls for comment before deadline Tuesday.
Swantz said the city only recently received a complete set of drawings for the project, which has been under construction for several months. He said the explanation for the tardy plans was that LSA and Gorman lost key staff members who were working on the project.
“I guess there was a vacuum for too long of a time,” Swantz said. “This is a major project.”
La Crosse is not in any immediate danger of cost overruns, Hutchens said, as only 3 percent of the city’s contingency money for the project has been used.
Although the city did not establish penalties for drawings submitted past deadline, Hutchens said, the city is discussing with LSA the legal implications of cost overruns and potential liability claims.
“We don’t know how much extra money we’re going to be looking at when it’s all said and done,” he said.
“But we’re already looking at a range of over half a million dollars.”
But Hutchens said the city is not without blame because it approved putting the project out to bid before complete drawings were available.
“The concern was that had we delayed and spent more time working out all the details,” he said. “With the economic downturn, the developer may have backed down since they had to work under a certain timeline to get tax credits for the project. On the other hand, had we waited, who knows if we could’ve got a better price for the project?”
For now, Hutchens said, all sides are working cooperatively, and completion of the building’s exterior is on schedule for the end of the year. Gorman & Co. is likely to begin interior work next year, and the city’s transit center portion of the building should open in spring 2010.
Swantz said he expects fireworks before then.“The fight over who pays for what,” he said, “may very well occur once the exterior construction finishes.”