The Redevelopment Authority of the City of Milwaukee eliminated a local bidder preference from the Talgo Inc. project to avoid any chance a lawsuit would delay work.
The authority, under a lease agreement with Talgo, has until July 1 to complete renovation of a 300,000-square-foot building at the former Tower Automotive site for Talgo’s Milwaukee train manufacturing yard.
The redevelopment authority, which on Friday will open bids for the project, originally included the local preference as well as local hiring requirements in the contract documents but amended the bidding rules last week to remove the preference provision.
“My understanding is the legal issues were one of the most significant issues,” said Jeff Fleming, spokesman for the Milwaukee Department of City Development.
The project’s complexity means very few, if any, Milwaukee contractors could bid it as a general contractor, said Larry Rocole, vice president of J.P. Cullen & Sons Inc.’s Brookfield office. He said it helps the city crossed out the preference because Cullen is not from Milwaukee.
“When you look at the size of the project, the number of pages in the addendum and the tight time frame,” he said, “you’ve got to have a pretty sophisticated company to handle this.”
The city in March 2009 passed a law giving companies within the city of Milwaukee a bidding preference of 5 percent, or up to $25,000, on city projects. The city is a defendant in a circuit court lawsuit with sewer contractors that sued the Milwaukee Department of Public Works after they lost contracts because of the local preference law.
Such a lawsuit, if filed on the Talgo contract, would make it difficult for the city to complete the up to $6 million project by July 1, Fleming said.
The preference law does not apply to the redevelopment authority anyway because it is a private corporation, said Deputy City Attorney Katherine Block. The authority, she said, is governed by different state bidding rules from the city departments that are required to include the preference.
The redevelopment authority is staffed by Department of City Development employees and run by appointees chosen by elected city officials.
If the authority were to routinely apply the preference law on projects, the authority would have to modify the language and city attorneys should review such a proposal before it is used, Block said.
Fleming said the redevelopment authority has not considered regularly applying the preference law.
“It hasn’t been brought to the board yet,” he said, “but it’s certainly a consideration for the future.”
Alderman Willie Wade, who sponsored the law that includes the local preference program and sponsored the lease agreement for Talgo’s new Milwaukee facility, supports the decision not to apply the preference, said Bill Arnold, Common Council spokesman.
“He had to weigh everything,” Arnold said, “and, in the end, the jobs that would be created long term were the tipping point for him.”
There was not a Milwaukee-based general contractor in attendance at last week’s mandatory pre-bid meeting for the Talgo project, but builders who were there said they are happy the preference is not a part of the project.
“Obviously, as a company outside of the city of Milwaukee, it’s a disadvantage to us,” said Brent Arnold, project estimator for Hunzinger Construction Co., Brookfield.