Today’s LJS story on a prominent economist’s opinion that most arenas and stadiums are not the economic panaceas they’re advertised to be was interesting to me, having covered the planning of Lincoln’s $340 million arena project for a half dozen years.
Perhaps the toughest story to get in the Journal Star was one in which I interviewed a bunch of economists about this very sentiment that such publicly financed projects are not the shot in the arm supporters say they will be.
It was one of the most heavily edited, scrutinized stories I’ve written in my 20-year journalism career. The city election was coming, and we wouldn’t want to poison people’s mind with such sacrilege, would we? After the story was published, one of the leaders of the pro-arena movement told me they would be coming out with their own economist to refute my story’s findings. About a week later, a UNL economics professor wrote this guest column, sort of vaguely refuting my story, I guess.
Which was funny, given that UNL economists just were nowhere to be found whenever I tried to get them to comment on Lincoln’s proposed arena. It seemed they were ducking the issue.
And then last year I took a UNL economics/journalism class, and that very professor, David Rosenbaum, was frequently a guest speaker. I couldn’t wait to ask him about how his opinion of arenas seemed to go against the grain among economists. When I finally got my chance, he refused to answer my question. I think he knew who I was. I dropped the class soon thereafter. I figured if we couldn’t speak freely about the biggest economic question facing our own fair city at that moment, what could we talk about honestly?
Before a shovel of dirt has really been turned to begin construction of Lincoln’s $344 million arena project, the project has already failed to deliver on the mayor’s promise that it would done with the utmost of transparency and accountability.
For many reasons.
But let’s start with the most glaring: Lincoln taxpayers recently learned they will be paying Burlington Northern Santa Fe railroad an extra $3.4 million to get out of the way of the project. BNSF told the city that due to delays in getting the project off the ground last fall, they are behind schedule, and it will take 3.4 million dollar bills to get them back on schedule, and the city will pay them up front, on a quarterly basis.
And… if the city doesn’t pay up, it can kiss its promised-to-UNL and promised-to-Lincoln September 2013 opening goodbye.
But that is not the worst of it. The worst of it is the fact that arena program administrator Dan Marvin has not felt compelled to even explain to the public, the guys footing the bill, exactly who is to blame for the project having gotten behind schedule. Journal Star reporter Nancy Hicks asked him who was responsible for the delay, and he responded, “I don’t think it is helpful to point fingers.”
So somebody – either the city or BNSF – held things up to the point where the project is behind schedule and now BNSF is exercising its right (as allowed by the railroad’s agreement with the city) to charge the city for any extra costs, and we the public don’t need to know who’s fault it is? I also asked Marvin who’s fault it was, and he did not respond.
Utmost transparency, huh? Transparency is not just putting your agendas and background materials on a website that few people know where to find or navigate. That is standard procedure at city hall. (Go ahead and try finding the JPA agenda once, I’ll time you. Gene found it fast, but he’s smarter than the average bear.)
Transparency is not just allowing the public into the room for your JPA meetings; that is the law.
And transparency is definitely NOT allowing the prime contractor to handle all of the bidding and bypassing the city’s purchasing system to advertise and take bids. Translation: You, the public, will never be able to actually see all of the bids. You will be allowed to see what companies bid, and how they were scored by the prime contractor, but you will not see the bids. Seeing the bids is a central tenet of accountable government – but Mayor Chris Beutler threw that out the window when he selected Mortenson Construction to do the job.
That is neither transparent, nor accountable. But this JPA allowed it. Not only that, but the contractor did not properly advertise a recent meeting for potential subcontractors, and had to basically re-do the meeting.
But refusing to tell the public who caused the delay that will cost taxpayers $3.4 million? That’s a new low. Even more incredibly, my sources are telling me BNSF is probably most to blame for the delay.
So let me get this straight: BNSF’s contract allows it to charge the city for every dime it incurs above and beyond the $46 million we’re already paying them to move, and even if they cause a delay, they can charge the city for it. And if the city won’t pay, they can say, “Sorry well then we can’t get this done by your opening date.”
It’s like legalized blackmail.
I was always quite surprised by local officials’ promises for the past five years that BNSF was a very cooperative landowner. BNSF’s reputation precedes it, and it is not one of bending over backwards for cities that need a favor. But always, we were told, the railroad was playing ball. What Lincoln officials didn’t seem to get is that BNSF is in a whole different league – their bosses do not particularly care if you put a local 2015 Vision big shot on a plane and send him down to Texas to tell the BN bosses how it’s gonna be. (That actually happened.) They do not care if your local bigwig development attorney tries to tell them how things are going to be done.
Things will be done the way BN wants them done. Clearly.
A local newspaper columnist – who normally covers the Rainbows and Butterflies beat – recently opined that just because BNSF is demanding another $3.4 million, that doesn’t mean the project is over budget. Well, no the whole project isn’t over budget, but some line items are higher than expected. And if you’ve promised the citizenry you will come in “on time and under budget,” you start whacking things out of the budget to make up for the overruns.
Which is why city is now putting aluminum wiring in the arena, not copper, and not doing floor-to-ceiling tile in the restrooms and is scrapping, for now, those electronic signs that were supposed to guide people to the arena.
Yes, those signs were advertised as part of the project, but to make budget, they’re out for now. That’s how it’s done.
So… by my count, we are not getting transparency, we are not getting accountability, and we are cutting corners all over the place to keep this baby in budget. I could go for some rainbows and butterflies right now.
The general contractor building Lincoln’s arena has scheduled a second “pre-submission” meeting Monday — after some complained that the one held Tuesday was not appropriately advertised.
The meeting is to inform potential subcontractors of the qualification process that will be used to select subs for everything from plumbing to electrical work to concrete work in the 460,000-square-foot arena.
Mortenson Construction of Minneapolis is holding a second meeting Monday at the Cornhusker Marriott at 4 p.m. Mortenson says it will select contractors based on their qualifications and proposals.
Interestingly, the Tuesday meeting was not advertised anywhere in advance other than in the sports section of the Journal Star and in an obscure part of the Haymarket Now website. In addition, the qualification documents will be “privately opened,” according to the website where the RFP is listed.
Remember, Mortenson is in charge of soliciting bids — bypassing the city’s usual eBid process, which caused a stir a couple of months ago — so I guess we can expect things won’t go the usual, transparent way we’re accustomed to.
Currently, Mortenson is looking to hire contractors to do:
• Concrete Structure: All cast in place concrete systems including formwork, rebar, pumping, embeds, placement and finishing. Scope also includes all concrete masonry unit construction.
• Structural Precast Concrete Stadia: All precast concrete systems for the bowl seating including erection and caulking.
• Structural Steel: All structural steel detailing, fabrication, and erection.
• Metal Wall Panels: All metal wall panels that form the envelope and exterior features of the building.
• Exterior Glass Curtainwall: All curtainwall and glazing for the building envelope.
• Elevators & Escalators: All vertical transportation systems for the public,service personnel, and freight.
• Plumbing and Mechanical Systems: All plumbing, HVAC, sheetmetal, mechanical equipment, and Building Automation Systems.
• Electrical Systems: All power, lighting, lighting controls, fire alarm, and lightning protection systems. This scope also includes all cable tray, raceways, conduit, and coordination for low voltage systems outside of low voltage/teledata rooms.
• Low Voltage Systems: All cabling, terminations, equipment, programming and commissioning for sound, broadcast, CATV distribution, telephone/data, and surveillance/access control. This scope also includes all conduits, raceways, and cable management inside of low voltage/tele-data rooms.
• Coordinate cable tray and raceway routes outside of low voltage/tele-data rooms with electrical contractor.
Proposals are due by May 20 and can be sent to John Hinshaw, Senior Project Manager, at the office of Hampton Enterprises, 3701 Union Drive, Suite 100, Lincoln, Neb. 68516 and via email to firstname.lastname@example.org.
For more information, check out the “request for qualifications” addendum 1 on the bottom of this web page. Or contact: John Hinshaw at email@example.com or (502) 377-4194.
OK the election’s over, now we can get back to keeping tabs on that pile of dirt west of the Haymarket, which will eventually transform into a big, shiny Arena!
Interesting stuff on the horizon: During the Joint Public Agency’s meeting Thursday, the three-member arena overseers will:
• Authorize closing on the city’s $44 million purchase of Burlington Northern Santa Fe land and relocation of the railroad tracks to make way for the arena.
• Authorize a $5.6 million contract with Judds Construction to prepare the site for construction of the arena.
• Amend its engineering contract with Olsson Associates, adding $1.8 million for additional work, including work on the 10th Street and Salt Creek Roadway improvement project; design work on M and N streets, final design for those “dynamic message signs” that will point drivers toward the arena; preliminary design for a parking garage; and traffic analysis and conceptual design work to make improvements to the intersections of First and Cornhusker streets and Sun Valley and West O Street. Those last two are the street projects I recently wrote about with regard to rumors that the project is going over budget. More on that later.
• Establish a budget so the JPA can begin essentially paying the city public works department’s engineering department for performing work. How much will the city be reimbursed for their work? $1.25 million.
• Consider a $14,500 change order to TCW Construction for the 10th Street and Salt Creek Road project, bumping the total price tag to about $2.8 million.
If you’re interested in attending, the meeting is at 3:30 p.m. in city hall, 555 S. 10th St.
Last week, a Republican arena supporter (there were many of them) forwarded me an email he received from a supporter of Mayor Chris Beutler’s urging him to donate to Beutler’s campaign and vote for Beutler tomorrow.
What was curious to him was that the author apparently tapped the old pro-arena database to send out this mass e-mail, which said, in part:
Mayor Beutler’s leadership and determination were critical in getting the Arena passed. Now, he is less than a week away from his own re-election campaign and he is being attacked for his support of the Haymarket Arena by the same nay-sayers who’ve always opposed the Arena.
Although Arena construction has begun, there is still a tremendous amount of work left to be done. Lincoln needs Mayor Beutler’s steady hand and leadership to ensure that the project is completed on time, on budget, and to ensure it’s full potential is realized.
The email was sent by Phil Montag, who was part of the “Citizens for Jobs and the Lincoln Haymarket Arena” or YES group (who’s against jobs? I always wondered). The recipient of the email was bothered by it, because he said during the arena campaign, many Republicans signed on to the YES campaign even though it was being run by the usual band of Democratic PR pros. They were assured the database wouldn’t be used for political purposes down the road, he said.
Of course, it was. In that case, an in-kind contribution should be recorded somewhere in campaign finance reports. We’ll see if it shows up.
The program manager for Lincoln’s West Haymarket arena project says the project is still on budget — disputing recent rumblings that the $340 million project is over budget.
During an open house for subcontractors Wednesday night, Mortenson Construction Vice President and General Manager of the Sports Group, Derek Cunz, said at this point it’s typical for a lot of “wish list things” to creep into a project, but he said the project is tracking on budget so far.
Jim Martin, program manager for the arena project, acknowledged that two street projects the city expected the state to do have been delayed. Those are improvements to the intersections of First Street and Cornhusker Highway and Sun Valley Boulevard and O Street. Improvements to those intersections are important to help traffic flow smoothly in and out of the newly developed area west of the Haymarket.
Martin said the city is looking at funding a “modest engineering study” to see if there are “interim solutions” to improve traffic flow at the intersections until the state can do the projects. His firm is reviewing the cost of the study, which he said would probably be less than $50,000. The Joint Public Agency which oversees arena financing and construction would have to approve the expenditure, too.
But he said the project is still on budget.
Mortenson Construction, the Minnesota-based general contractor who will be building the $168 million arena portion of the project, held an open house Wednesday night at the Cornhusker Marriott for subcontractors looking to get a piece of the arena action. Pickups with logos filled nearby streets and an adjacent parking garage, and probably 300 people filled an overheated ballroom to hear about the project. It was standing room only.
Some nuggets of news:
• Construction is scheduled to begin Sept. 16.
• Mortenson wants to begin accepting resumes (so to speak) next week for mechanical, plumbing, structural steel, structural precast, electrical and other work and award bids in June. That may be a bit too optimistic, however.
• Mortenson will open an office in the Haymarket next month. Anybody want to wager any bets on who they’ll rent from?
• Cunz said the company has never failed to finish a project on time and on budget.
• Cunz said sports projects are notorious for hitting time crunches and having long punch list items — but Mortenson’s goal is to have no punch list items by the first Husker basketball game.
• Senior Superintendent Dave Mansell said the city tried to wedge the arena between two rail lines — since they won’t be able to be moved until September 2012 — but there wasn’t enough room, so construction will go on between two active rail lines.
Arena designs unveiled last week indicate the arena will have standing platforms five to seven rows deep, rather than seats. Jane Kinsey, a member of a new Lincoln government watchdog group, questioned the wisdom of making students stand up during entire games during the Thursday meeting of the Joint Public Agency overseeing the project. She said it’s not fair for students to have to stand.
(JPA member Jayne Snyder apparently didn’t see the Wednesday front-page story on this, “Isn’t that the football stadium?” she asked during the meeting. Nope. It’s your arena.)
Stan Meradith of DLR, the architect, said the Nebraska athletic department requested standing platforms, which are typical in arenas nationwide, he said.
“They want their students to stand,” he said. “We easily could put in seats and benches.”
UNL Regent Tim Clare said when the university, the city’s partner, says that’s what they want in the arena, the JPA should honor their request.
“We could put seats there (but) they’re not gonna use ’em, they’re gonna stand,” Clare said. “That’s the way it’s been, that’s the way it is around the country.”
In fact, Clare said Marc Boehm of the UNL Athletic Department was adamant that they want standing platforms on three sides of the court.
As an aside, I found it funny how in the LJS story cited above, the writer quickly pivoted from the students’ standing issue to whether season ticket-holders would have any trouble seeing over the standers.
The city has finally released new renderings of what Lincoln’s new arena will look like when it’s complete in (hopefully) 2013. They are not real detailed, but they are different from the renderings that have been public up to now. The arena appears to be a lighter color, but what really jumps out at me is what appears to be a huge picture on the side of the arena apparently depicting a historic picture of the Haymarket.
Take a gander and then have at it with your architectural critiques.
The city of Lincoln began charging the new occupation taxes — which are usually passed on to consumers — in January. The first batch of taxes were due in late February — although bars and restaurants can choose to pay the tax quarterly — and Finance Director Don Herz told the Joint Public Agency that oversees the arena project that the city collected about $743,000.
“I’m very comfortable with those numbers,” Herz said. In fact, depending on the final numbers that come in by April, he said the tax revenue “may slightly exceed” the city’s projections. Car rental and hotel businesses are seasonal, he said, and will fluctuate.
Speaking of occupation taxes, the Journal Star is reporting that the Legislature is on the verge of taking away the city’s authority to charge occupation taxes on the sale of telecommunications equipment. The city of Lincoln broadened this tax from services to equipment last year, but the Legislature was lobbied heavily by retail groups to rein the city in. Looks like a compromise would allow the city to keep the tax until 2013 — giving the city breathing room for awhile.
I’m hearing LIBA (the Lincoln Independent Business Association) is concerned about the strings attached to the federally subsidized bonds the city is using to help finance part of the arena project. According to my source, since the city is using federal Build America Bonds, contractors will have to pay “prevailing local wages” on the job, which this person says will add millions to the cost of the project — perhaps more than the city will save by getting the low-interest financing.
For example, a sheet metal worker would have to be paid at least $26.17 an hour plus $12.52 in benefits, according to the federal Davis-Bacon requirements for this area.
I was told LIBA might bring this up at the JPA meeting on Thursday, but they didn’t.