The Joint Public Agency overseeing financing and construction of the project will be asked Thursday to terminate the temporary contract that SAIC Energy, Environment & Infrastructure (formerly Benham Companies) has been working under for about five months and approve a regular contract with SAIC worth $4.4 million that lasts through the fall of 2013. SAIC is the program manager — they coordinate budget controls and progress to make sure the project gets done on time and on budget.
Interestingly, the new contract adds a subcontractor called PC Sports of San Antonio, Texas, to serve as project manager for the arena portion. Their contract is worth $913,500 — or $30,450 a month. According to public documents, SAIC will provide PC Sports free office space, document control and support and administrative support. The documents don’t indicate whether this is an increase in the projected budget for program management.
PC Sports was founded in 2001 and according to its web site, the company provided project management services for the AT&T Center in San Antonio, the Sprint Center in Kansas City and the KFC Yum! Center (please don’t let us get such a dorky arena name!) in Louisville, Ky.
The JPA will consider the new arrangement during its meeting at 9 a.m. on Thursday at city hall, 555 S. 10th St.
According to public documents, the cleanup of a diesel plume in the area targeted for Lincoln’s new arena will take longer than originally planned and cost about $400,000 more than projected.
The arena development is largely taking place on the active railyard west of the Haymarket — where there is a diesel plume about the size of a city block northwest of Lincoln Station. General Excavating of Lincoln was hired to remove the diesel.
The three-member Joint Public Agency overseeing construction of the project will be asked Thursday to approve a change order that will — among other things — give the excavating company more time to do the job. The documents indicate originally the contractor was scheduled to begin work Dec. 22 and finish the remediation of the diesel spill in 55 days, by Feb. 15. But due to delay of approval of the contract, the “notice to proceed” wasn’t issued until Jan. 13.
General Excavating argued weather caused delays, too, but the city said weather delays should have been taken into account when the company submitted its bid, since the work was to be done during the winter and the city had “unseasonably favorable” conditions during most of that time frame. The city is proposing that the JPA grant a seven-day extension due to weather to account for blizzard conditions the first week of February.
The JPA will also be asked to grant a 25-day extension due to BNSF’s delay in completing an overhead power line relocation and no temporary power to do the work.
All in all, the change order will change the target date for the work to be substantially completed to May 10.
“While the West Haymarket Redevelopment Project is on a very aggressive timeline, we understand that there may be additional requests for extensions of time due to unforeseen circumstances,” Ernesto Castillo of the Urban Development Department wrote to the contractor.
After several days of bad publicity, the city’s arena JPA finally responded to the criticism with a letter to the Journal Star yesterday. Although given that the three JPA members aren’t legally allowed to meet privately — because it’s a violation of their bylaws — I’m not sure how they got together to write the letter.
Perhaps someone wrote it for them?
Let’s get into the meat of the issue: As I’ve written before, the arena JPA has taken a troubling turn lately, allowing its general contractor, Mortenson Construction of Minnesota, to skip using the city’s purchasing process to choose most of its subcontractors. Mortenson has argued that it needs to have this flexibility to get the project done on time and under budget.
Problem is, they’re not doing it the way the city specified when it solicited bids from companies nationwide.
Trivial, I know. Unless you’re one of the other bidders.
Now the JPA (that’s Mayor Chris Beutler, Councilwoman Jayne Snyder and Nebraska Regent Tim Clare) is defending its decision to go ahead and approve the pre-construction contract, despite its less-than-transparent features. They argued in their letter that the city’s electronic bidding process (e-bid) wouldn’t allow Mortenson to steer contracts to Lincoln businesses, because they would have to take the lowest bid.
Not so: It’s not the e-bid computer system that prohibits them from playing favorites for local companies — it’s the city charter. However, the city doesn’t have to take the low bid if the company doesn’t meet specifications — and those specifications can include all the “important factors” (like their safety record or experience) the JPA said Mortenson needed to be able to evaluate in choosing subcontractors.
They also said e-bid wouldn’t allow Mortenson to force subs to “sharpen their pencils” to find additional savings after bids are submitted — but that also opens the door to wheeling and dealing with their preferred sub to make sure they get the job.
The JPA did acknowledge the validity of “the concern about transparency” — but claimed the amendments they adopted would bring some transparency to the process. However, seeing scorecards and names of bidders does not eliminate the fact that the public STILL WILL NOT BE ABLE TO SEE THE ACTUAL BIDS.
This kind of secrecy and shrouding got Mortenson in trouble in Kentucky, and it may just get them crossways with contractors here, too, if the JPA continues to allow Mortenson to run roughshod.
Sometimes I have to wonder if our elected officials have any idea what they’re doing.
Like yesterday, when the Joint Public Agency (the board overseeing the arena project) met to talk about a pre-construction agreement with their general contractor, Mortenson Construction.
Although the city had advertised for a contractor that would use the city’s open, transparent bid process to choose subcontractors, the pre-construction agreement approved by the JPA just obliterated that promise. It will allow Mortenson to choose subcontractors to do mechanical electrical and plumbing, structural steel, precast concrete, concrete, exterior walls and vertical transportation.
I wrote a story Tuesday about how the agreement makes a mockery of the promises Mayor Chris Beutler has been making about how the project will be done with complete transparency and accountability. The Journal Star wrote about it the next day. Then the JPA met to consider the agreement – and was completely snowed.
Even LIBA couldn’t convince them to slow down, take a week to mull it over, reconsider whether bids should be opened privately. Nope – they plowed forward, driving blindly.
Understand, the JPA is comprised of Beutler (whose staff wrote up this deal), Councilwoman Jayne Snyder (who rarely deviates from Beutler’s agenda) and University of Nebraska Regent Tim Clare (our only hope to ask the right questions).
Clare opened the discussion by saying they’ve come up with an amendment that should address concerns about transparency. Which would be great – if only it were true.
The only relevant change seemed to be that a JPA member or designee would be able to observe the discussions and interviews with bidders. How is that going to work? Will a JPA representative be hanging out with Mortenson from here on out? Listening in on their conversations and negotiations? Impossible.
Also, bid scorecards would be made public. The way I understood it, the scorecards were already going to be made public. Seeing scorecards is not the same as seeing what the bids were.
Something is pushing the city to go along with Mortenson’s more private way of doing things – even though Mortenson got sued for this very type of keep-everything-a-secret process in Kentucky. And even though Beutler has repeatedly said this will be the most transparent, open process the city has ever seen. Within a week, he was retreating from that position. Now he’s completely forgotten it.
Who is holding this guy’s feet to the fire? Clare tried, but failed. And he’s the one guy whose vote could stop everything, according to their bylaws.
John Wood, senior vice president of Mortenson Construction, attended the JPA meeting, and buttered ’em up good. Even though it appears Mortenson is abandoning the promise it made when it put in its proposal to use the city’s open, transparent bidding process, he basically said they have to alter that to get the project on time and on budget.
He said Mortenson will use “tried and tested methodology” used on big, complex projects like this and they will be open and transparent “to the greatest extent possible.”
To his credit, Clare asked some good questions, like whether Mortenson would just hire their non-local “friends” to do work.
To his credit, Wood acknowledged many regional and national firms are interested in getting a piece of arena work – including firms they’ve worked with before. Wood said those firms have been advised to hook up with Lincoln businesses.
Wood said Mortenson is willing to use the city’s eBid procurement system, but did not elaborate. It still appears the eBid will only be used to “receive” bids, which will be opened privately.
Mayor Beutler commented that he thinks some citizens don’t understand the city is using the construction manager at risk method to build the arena – which is different from the usual design-bid-build method the city uses to build streets and bridges. Which was irrelevant – that method doesn’t require bids to be so secretive.
The upshot is that Wood made everything sound peachy, the JPA board bought it, and nothing substantially changed.
The doling out of arena subcontracts may not be as open and transparent as originally advertised if the Joint Public Agency that governs the arena approves the pre-construction agreement on its agenda Wednesday.
Mortenson Construction of Minnesota and Hampton Enterprises of Lincoln are construction manager at-risk for the arena project, and the way they handle awarding of contracts is of great interest to companies hoping for a piece of the $340 million project.
However, the agreement (see it here: JPA-Attach-01-26-11 the agreement begins on about page 140) does not require Mortenson to follow the city’s usual open, transparent bidding process and hands over construction of two more projects that weren’t in the original project scope — a pedestrian bridge and arena plaza — to Mortenson rather than put them out for bid to give other companies a shot at them.
The mayor’s office responded to that, saying “The beginning and ending points for projects are hard to define, especially when it pertains to a bridge. The JPA has looked at the arena block and has generally assumed that the arena block would be built by Mortenson” and would avoid putting multiple general contractors in a “tiny area.” The bridge will land on the arena block, the mayor’s office said, and the JPA already has an agreement that Mortenson will carry a $25 million liability policy.
“When swinging stuff over active tracks it is in the best interest of the taxpayers to delegate the bridge responsibilities and liabilities, over to Mortenson, given its proximity to active railroad tracks,” the mayor’s press statement said.
Same goes for the civic square on the arena doorstep — the mayor’s office said that will be done by Mortenson. The statement didn’t address why neither the pedestrian bridge nor the civic plaza was mentioned in the original scope of service, but are now being added to Mortenson’s job.
Although the city had advertised for a company that would use the city’s bid process to choose subcontractors, the propposed agreement would allow Mortenson to choose subcontractors to do mechanical electrical and plumbing, structural steel, precast concrete, concrete, exterior walls and vertical transportation — which seems like a big chunk of the work. It appears Mortenson will handle everything except the “receiving” of the bids through the city’s eBid system. But then the proposals will be opened privately — which caused Mortenson some trouble in Kentucky.
In response to that, the mayor’s office released the following statement: “Mortenson has proposed to use the E-bid system. The proposal process will be transparent, which means that the scoring criteria and scorecard will be published with the RFQs and RFPs and the resultant evaluation will be published after award. Mortenson and Hampton will be explaining in greater detail at the JPA meeting tomorrow about how this process would work and how it has been used successfully on other projects. At the end of the day, what we they are proposing is standard and customary practice for CMAR projects. Typically, the selection of the subcontractors are the CMAR’s responsibility to select based on their contractual obligation to guarantee the cost and schedule and provide the best value and quality to the taxpayers.”
In other words, this is the way Mortenson wants to do it, the way they usually do it, in order to keep their promise to come in on, or under, budget.
Mayor Chris Beutler has long promised this project will be open, transparent and fair — but lately, city officials have been backing away from that open and transparent stuff, because it doesn’t seem to fit with Mortenson’s way of doing things.
Note these two grafs in a Nov. 25 Journal Star story:
Jim Martin, hired as program manager to coordinate all aspects of the local arena design and construction, has voiced concerns about using the city’s e-bid system, said Dan Marvin, who represents the city on the arena team.
The city’s e-bid system requires the purchasing department to explain why it is not taking the lowest bid. That process also allows the public to view bids electronically just minutes after they are opened. Too many restrictions may hurt the Mortenson-Hampton team’s efforts to get the project done on time and under the guaranteed price, Marvin said.
You can almost picture Marvin backing away, can’t you?
This agreement is not a done deal. It goes before the arena JPA on Wednesday. Tune in to the city’s Channel 5 at 3 p.m. Wednesday to see what happens. (JPA-Agenda-01-26-11)
In the heat of a rugged campaign, it’s easy to make a mistake. That’s what appears to have happened up in Omaha, where Jim Suttle’s opponents say the mayor’s staffers broke the law by sending campaign e-mails from work.
The pro-recall side is saying Suttle’s staffers should not have used their city e-mail accounts to respond to the hullabaloo over anti-recallers busing homeless people to the election office to vote (presumably against) Suttle’s recall.
Nebraska state law says public officials can express their opinion on ballot measures, but they cannot use public resources to do so. They can only provide neutral, factual information about the proposal when they’re on the clock, although they can support or oppose ballot measures on their own time.
Suttle’s staffers sent out e-mails in response to a deluge of requests for a response to the allegations about the busing scandal. They now say they did nothing wrong, because they’re allowed to respond to requests for information.
This brought me back to April, when Mayor Chris Beutler held a press conference to talk about how he was going to make sure the arena-building process would be transparent and accountable — and he used the opportunity to also say the arena would be key to Lincoln’s “prosperous future.”
At the time, Nebraska Accountability and Disclosure Commission Director Frank Daley told me there are two exceptions to the law: Public employees and officials can respond to inquiries by the press or public and research and prepare materials to assist the governing body in determining the effect of a ballot question. Public employees also can answer questions about a ballot measure during a news conference on an unrelated topic.
However, Beutler’s information was hardly neutral, and he wasn’t asked to give his opinion on the arena project — it seemed a clear violation of the law, but Beutler’s city attorney thought it was legal, and apparently nobody complained to the A&D about it, so he got by with it.
In Omaha, it’s a bare-knuckled brawl — I doubt they’ll let Suttle get by with it.
The financing was admittedly complicated: About half the $340 million price tag would be paid off by a new tax on bar and restaurant tabs, car rentals and hotel rooms. However, the words on the ballot pertained only to whether the city should be allowed to bond the proceeds of the so-called “turnback tax” — state sales taxes generated in the arena and nearby hotels and “turned back” to the city for the arena.
Two different revenue sources altogether, but people seemed to mix the issues and conclude that only the bars, restaurants and hotels near the arena would be paying the new bar and restaurant taxes. No matter how many times I wrote that it would be a “citywide” tax, people’s eyes probably glazed over when they started reading about the JPA and turnback taxes and the fact that they were only voting on $25 million of a $340 million project and whether Beutler or Bereuter was presiding over this whole thing… it was a challenge to explain.
I knew we had a problem when it became clear during a conversation with the editor of the paper that he didn’t grasp that the tax would be applied citywide. If he didn’t get it, (and presumably he read all 232 stories I wrote) how was the average voter going to get it?
I don’t know if the architects of the finance plan wanted the whole thing to be confusing (I mean, just trying reading this story I wrote trying to put it all in English), but if they did, that was genius.
It seems people are finally catching on, now that the new 2 percent tax began being applied to their bar tabs and McDonald’s meals this month. You’re seeing letters to the editor complaining about the “tax on a tax” (because the bar and restaurant tax is computed, and then sales tax applied to that). I’ve eaten at restaurants where the owner hands over the bill and says “You can thank the mayor for that arena tax.”
My husband bought food at a grocery store deli the other day and they applied the restaurant tax; the workers said it was a royal pain because they were struggling to change over their checkout system to accommodate the new tax.
Meanwhile, in Omaha, Mayor Jim Suttle faces a recall election on Tuesday largely due to unhappiness over a 2.5 percent dining tax (on bar, restaurant and catering tabs).
Ours is 2 percent, plus there’s a new 4 percent tax on car rentals and hotel rooms. In addition, Beutler’s administration convinced people to raise their property taxes for a stormwater bond, increased property taxes a bit, and expanded the city’s telecommunications tax to include phone equipment. How did Beutler get by with all that, while Suttle is up against the wall? And don’t say Rick Hoppe, his political mastermind/chief of staff.
Well, whereas Omaha needed the money to get out of a budget crunch and pay for their pensions and awful sewer system, we get an arena to try to compete with theirs.
However, I think another key is that Omaha’s bar and restaurant lobby geared up right away, fighting Suttle’s proposed tax hard. The media really covered it, too, and things snowballed from there. The Republicans seized on the opportunity, and here we are, waiting to see if they’ll get an election do-over.
In Lincoln, bar and restaurant folks mostly wanted the arena, because they hope it’ll bring in more business (even though the city’s own study showed the new development to be built near the arena will capture the vast majority of the arena-goers’ walking-around-money) so they swallowed the tax.
It seems some of them are just now beginning to be bothered by the aftertaste.
The West Haymarket arena project finally has its own website — aside from the one the city had been maintaining. Click here to see it.
You’re paying for it, so what do you think? The board that is handling financing and construction of the arena bought it — along with this Facebook page — for $24,000. They were created by the Thought District, a Lincoln company.
I teased them a bit for budgeting like $1,500 just for the Facebook page, but I guess somebody has to keep that baby updated, so that’s probably not so bad.
I think it looks nice and professional (as opposed to the old site) but it really doesn’t have much more than the Lincoln Journal Star already had on its site (much of which I gave them to put there). The LJS had pretty much all of those same documents and maps and so on in the months leading up to the spring election.
But they should be there. However, even though they say the website’s purpose is to ensure the project’s transparency, clearly it’s a marketing tool — the latest rendition of the YES campaign’s work. They even used the same green YES campaign style.
Then again, what sense would there be in the city spending money to foment more debate over whether to build the arena? That ship has sailed.
As an aside, even though the arena won’t open until 2013, the concert industry is slipping now, according to this Wall Street Journal article.
This is a good example of how a journalist should cover job projections for arena and stadium projects. Nice to see I’m not the only reporter/blogger skeptical of the job projections that get thrown around when somebody’s trying to get a stadium/arena built!
CSL, by the way, did several feasibility studies for Lincoln before the city voted to build a new arena last spring. And Mortenson Construction was chosen to be the construction manager for Lincoln’s $340 million arena project.
It’s also worth noting that a consultant (hired by Lincoln) projected the arena project would create nearly 8,000 jobs — the same number of jobs a new Vikings stadium has been projected to create, even though that project would cost $954 million — nearly three times as much as Lincoln’s.
I did a lot of research into the jobs and economic development projections that were heavily touted during Lincoln’s arena campaign. (Remember this story?)
Boy, did that story ever stir up some people. The editor edited it with a fine-toothed comb and we locked horns over some of the things he took out. The final version that was printed was not how I would have written it, but at least it was published.
Let’s just say when all the big hitters in town are behind a big project, editors get very antsy about stories that question the assumption.
It only took about a week for Mayor Chris Beutler’s office to finally divulge who paid for nine people — including the mayor and city arena contractors — to fly around the Midwest looking at arenas in late October.
That wasn’t so hard, was it?
For some reason, Beutler’s office didn’t want to tell me who paid for the trip when I wrote about it a week ago.
However, a reporter isn’t completely helpless when a public official refuses to disclose public information. There’s this thing called the open records law, (Beutler ought to know about this, having been a state senator for like 24 years) and on Monday, I put in what’s called an open records request. That gave the mayor’s office four working days to respond to my request for information about the trip (particularly, who paid for it).
Their deadline is tomorrow. So what did they do today? Gave up the information. To the Journal Star. Touche’!
And now we know the answer: Nelnet paid for the trip. I’m not sure why the trip needed to be paid for by an outside company in the first place, nor why a student loan company would be the one to pay for it, but there it is.
The Journal Star story didn’t say how much the trip cost Nelnet, but did mention how uncomfortable the flight was for two members of the delegation who had to take turns sitting on a toilet in the Nelnet jet.
This is the mayor’s office works. They don’t like the fact that I’ve asked these questions, but they’re backed into a corner by state law, so they strike back by handing the story to the Journal Star.
That’s OK with me, as long as the information gets out. One way or another.
But I still don’t get why they would be flying around looking at the width of seats and “integrating an arena in a brick environment” when 30 percent of the arena design — if not more — was supposed to be done by now. The arena architects have already told us how wide the seats will be and if they haven’t begun to think about how to integrate the arena with the Haymarket, well they’re way behind schedule.
And why was the mayor the only one who didn’t pay for his own hotel room? The city paid for his, according to the J-Star.
But never mind all that. The important thing is that the mayor finally told the public who paid for the trip. Thank you.