A sharply higher cost estimate has West St. Paul rethinking the project's viability.
Just weeks after learning that its Robert Street makeover will cost nearly twice as much as expected, West St. Paul got another nasty surprise last week: a new estimate for City Hall improvements is $4 million higher than an initial estimate a year ago.
Council members said the higher cost, pegged at $11.4 million, puts the project in jeopardy.
There is "considerable heartbreak" that the two estimates are so different, said Mayor John Zanmiller. "Pare the number down to something that is palatable or find other alternatives," he told city staff.
Council members are looking to renovate City Hall as an improved space for the police department and to build a new energy-efficient administration building and council chambers beside it on the municipal center site at 1616 Humboldt Av.
In a study that assessed what the city would need in the building, done by BKV Group of Minneapolis in August 2011, the cost was estimated at $7.4 million.
But last week, Amcon, a construction management company working with an architect-engineering team led by Collaborative Design Group of Minneapolis, presented an updated estimate of about $11.4 million.
"To be off by this amount almost puts the entire thing in jeopardy," said Council Member Ed Iago.
One explanation for the difference is that BKV figured 15,000 square feet for remodeling at an estimated cost of about $1.9 million when the city actually planned to remodel 28,000 feet. The new estimate puts the remodeling cost at about $3.6 million.
Iago faulted BKV for leaving the police division and jail division out of its remodeling estimate. That "had to be a gross misunderstanding" on BKV's part, Iago said. "I question how that could take place" when one of the city's staff members physically walked them through the building.
"To me, this is just embarrassing," Iago said. "It's just embarrassing how a professional organization can miss the mark." It also makes the city look bad for not reviewing the work more closely, he said.
Once the BKV study was finished, city staff should have examined it and discovered the error before releasing the initial estimate, Iago said.
The city report on the new estimate also indicates BKV "grossly underestimated" the amount of grading and retaining walls needed. The current estimate includes $1 million more for the site work.
Bruce Schwartzman of BKV rejected the idea that his company had underestimated costs. BKV did a needs assessment study, he said. "It was a comprehensive, very well-done feasibility study."
The architect who followed up to design the building should have worked within the city's budget, Schwartzman said.
BKV is going over the new estimate to see where the two differ, said Ann Cerney, in business development for BKV.
"We are sitting down now and looking at what the architect did. It's completely different from what our original assessment was," Cerney said. "A lot of the site work has to do with where they're putting the building. Where we were going to put the building was not going to require all the retaining walls. We were going to attach it to the existing building. Now it's going to be a separate building. They are also adding new parking and a new irrigation system."
BKV figured 15,000 square feet of remodeling because the firm thought that was what the city wanted, she said.
Neither Amcon nor Collaborative Design Group returned calls seeking comment.
The city has not yet examined its estimate closely to see if it may be high. "But we will delve into those numbers," Iago said.
A new subcommittee will examine both estimates in the next month, said Iago, who is one of two council members on the committee.
Council Member David Wright said: "If this thing is going to cost us $12 million, I want to go back again and look at leasing" space in another building in town.
He said he had received some negative reaction to the revised cost of the Robert Street project from $10.4 million to $19.4 million. "Timing on this [city hall estimate] could not be worse."
The city may find a way to do the construction in phases to get the cost down, Wright said. Amcon also has offered a list of things that could be cut. If the city did not add the administration annex and just did the remodeling, that would save $4.5 million, said Todd Christopherson of Amcon.