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 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.
The board overseeing financing and construction of Lincoln’s $340 million arena project approved the use of condemnation — or eminent domain — to buy two pieces of property for the project.
After an executive session — a portion of the meeting that is closed to the public to talk about real estate negotiations — the Joint Public Agency unanimously voted to authorize the use of condemnation to “take” property owned by Alter Trading Co. (which owns Alter Metal Recycling, a scrap yard south of the Harris Overpass) and the Watson-Brickson Lumber yard owned by Jaylynn, a limited liability corporation if necessary.
Assistant City Attorney Rick Peo said the city and two property owners have been negotiating for months on what will be a “fairly complex” relocation. He said alternative sites for the scrap yard and lumber yard are difficult to find, and negotiations are “coming to impasse.” Railroad track work must begin this year, and the JPA needs to either acquire the properties or terminate rail services by May 8 to stay on schedule, Peo said. That’s why he said the “possibility of condemnation” is needed to get legal title to the land by then.
“This is a timing issue,” said Dan Marvin, who coordinates arena work for the JPA.
JPA member Tim Clare — a University of Nebraska regent — said he did “due diligence” and talked to the “players” involved in negotiations, and he said the property owners’ representatives were “very complimentary” and understand the situation. He said condemnation would only be used if necessary.
Peo said a condemnation hearing date would be scheduled to award damages, but negotiations would continue in the meantime.
“It buys you time,” he said of condemnation authority.
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.
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)
A recent Journal Star editorial lambasted a Virginia group for “pouring thousands of dollars into attack ads” in the November election and then refusing to report their campaign expenditures, claiming their campaign was “purely educational” since they didn’t urge a vote for or against a certain candidate.
This made me wonder where the editorial writers were earlier this year, when Vision 2015ers were pouring hundreds of thousands of dollars into the University of Nebraska Foundation’s UNF Charitable Fund, which spent about $200,000 on radio and TV ads supporting passage of the arena project.
They, too, claimed it was an “educational campaign,” but if you saw those ads with Tom Osborne, I think it was pretty clear which way T.O. wanted you to pull the lever.
It was a circuitous way to get their message across, but it also enabled Vision 2015ers donate money to the pro-arena campaign in a way that made it impossible to know who donated how much. And the beauty of it all was that since the money was going into a “charitable fund,” all those donations were tax-deductible.
To quote from the Journal Star editorial, about the Virginia group: “That robs Nebraskans of the opportunity to find out what sort of people are trying to influence their vote.”
Several accountants contacted me questioning the legality of a nonprofit “charity” spending hundreds of thousands of dollars to promote a ballot question. Some complained to Attorney General Jon Bruning, who has authority over non-profits, but he certainly had a conflict of interest in the matter, since he was promoting the arena all over the airwaves. (Remember those heart-warming nonpartisan ads with Bruning and Beutler?)
When Bruning participated in a pro-arena press conference toward the end of the campaign, I asked him about what he’d done in response to those complaints about the UNF Charitable Fund. He said he’d never heard about them, but promised that if any violations were found, he’d do something about it regardless of his personal support for the arena.
“I call it like I see it,” he told me. “The law is the law.”
A few days later, he emailed me to say that it was more of an IRS issue.
But you didn’t read about any of that in the Journal Star. Why? The editor said it wasn’t important enough to write about before the election.
That’s one of those moments where a reporter does her best to fight for a story, and then bites her tongue til it bleeds. Because I was not stupid, or easy to push around. Or both.
Somebody paid for the mayor and others to jet around the country looking at other arenas in late October. We’re not sure who it was, because the mayor’s office isn’t saying.
How’s that for more transparency and accountability from the man who promised it would be “unprecedented” on this, the most expensive public works project in Lincoln’s history?
I remember the press conference well. After months of stonewalling about details of the arena project, Mayor Chris Beutler finally invited reporters to ask any question they wanted, to look at any document they wanted. Of course, that lasted approximately one week — when I did something that pissed them off and they temporarily banned city employees from talking to me.
That was business as usual, covering the Beutler regime.
And it continues. On the mayor’s public schedule, Oct. 25-26, it said he was touring arenas in Columbus, Ohio, Louisville, Ky., Tulsa and Oklahoma City, Okla. and Wichita, Kan.
I was a little puzzled as to why he’d be touring arenas now — when arena designs are supposed to be 20 to 30 percent complete. In fact, arena supporters and city officials already went on an arena tour a few years ago. What was the point of this one? Perhaps we’ll never know.
And how much did it cost? I don’t know. Mayor’s office hasn’t responded to that question, and neither has arena coordinator Dan Marvin, who also went on the Tour de Arenas.
Marvin did, however, tell me a little bit about the junket. He said the attendees were Beutler, Stan Meradith and Greg Garlock of DLR (the architects), Tom Lorenz (who manages Pershing Center), Marc Boehm (Husker athletics guy), Ben Wrigley of CSL (the company that will market the arena) and Jim Martin of Benham (the Oklahoma company that is program manager for the arena project) and 2015 Visioner Dan Mulheisen.
Marvin said the flight was “privately paid for” but the other expenses “our own responsibility.” Marvin would not say who paid for the trip.
Whenever a mayor and two city contractors and other city vendors get free flights anywhere, it’s a matter of public interest. Was it paid for by one of the companies that has won arena bids? Before or after they won the bid? Was it paid for by DLR? Vision 2015?
All relevant questions — and I would expect answers from a mayor who promised “unprecedented accountability and transparency.”
The head of the state Accountability & Disclosure Commission, Frank Daley, says the flight would be considered a gift, and be reported on Beutler’s annual statement of financial interest. But those aren’t due until April. Hopefully, we won’t have to wait that long to find out.
The other day I took a look at the proposals given to city officials by the top two companies vying for the job as construction manager.
That would be Mortenson Construction of Minnesota, which teamed with Hampton Enterprises of Lincoln, and Turner Construction of New York, whose partner was Sampson Construction of Lincoln.
For shorthand, let’s call them Mortenson and Turner.
I had asked to see these proposals months ago when they were first submitted — and was denied access by the city — so when they finally became public documents I figured I’d better check them out.
Most of the proposals are devoted to resume-bragging, but among the interesting nuggets:
• Mortenson anticipates beginning construction in September 2011 and says construction will take two years.
• Mortenson plans to split the fees with Hampton 80-20, versus 50-50 for Turner and Sampson.
• Mortenson wisely pointed out its experience with rail line interfaces, use of the construction-manager at risk method and downtown and brownfield development.
• A big Mortenson selling point was its recent experience building Target Field for the Minnesota Twins — the promenade deck and part of seating was built over a BNSF main line that skirts the west edge of the stadium, carrying up to 14 trains a day. More than 2,650 feet of rail was relocated. And they built the main concourse on the west edge above two rail lines (a BNSF rail line and commuter train). Even more sticky than Lincoln’s plans.
• Jeffrey Applebaum, whose company was a consultant to the Minnesota Twins on the project, wrote a letter saying the Target Field site was “extremely small” and hemmed in on all sides by rail lines, highways and parking ramps. He said the greatest challenge was dealing with BNSF — Mortenson had to honor “elaborate processes and procedures” established in complex agreements with BN.
• Ed Hunter, project manager for the Minnesota Ballpark Authority (the state agency that owns Target Field), wrote a letter saying BN dictated there be no delays in train movements and that a single violation could shut down all construction within the railroad right-of-way.
• Mortenson promised to maximize local participation in business and labor and “right size” bid packages to allow smaller local contractors to get more work.
• A major deciding factor in the mayor’s decision to pick Mortenson was that they proposed a fee of 1.95 percent of the $130 million arena cost and $235,187 a month. Turner proposed a 2.15 percent fee plus $412,000 a month. With lump sum payments, that works out to $8.17 million for Mortenson and $14.45 million for Turner. There were differences, however, in the costs expected to be picked up by subcontractors.
• One thing I learned after looking at the proposals is that the arena will be built one half (roughly) at a time. Mortenson will build about half the arena on the west side of the two Amtrak lines west of the post office, because it will take awhile longer to move those tracks. Then when they are moved, they’ll build the other half. Interesting.
• Turner said the project could be built in 18 months if not for that Amtrak line — but removal of those passenger rail lines won’t be done until September 2012 so that part of the arena can’t be done until then.
Amtrak is also part of a delay in closing on the rest of the BNSF land. Arena coordinator Dan Marvin said there is a dispute over whom Amtrak should lease the new platform from. They now lease from BNSF, which proposed a lease agreement similar to others, for $1 a year. But Amtrak wants to lease from the city. Marvin said he thinks the issue is close to being worked out.
I was surprised by the city’s selection of Mortenson Construction of Minnesota and Hampton Enterprises to manage construction of a $168 million arena.
I figured the Turner-Sampson team was the leading contender, just because Sampson got in on the ground floor from the very beginning, when building a new arena was little more than a dream.
Sampson had a representative on many arena committees and task forces over the years, so when Sampson teamed up with Turner Construction of New York, I figured they would win the job. And in fact, they got the highest score of the four teams and were recommended by the city selection committee. But the mayor had veto power, and selected Mortenson. (See the scorecard CMR Rating Sheet.)
Granted, you have to get invited to get in that early — the arena architect ultimately won the designing job after working pro bono for the city for years — but that also seems unfair to other companies.
So it was good to see that the fix was not in, so to speak.
Mortenson certainly went all out to get the job. They hired lobbyists and assembled a team of representatives of Mortenson and Hampton to meet with local officials.
Heck, they even called me up — when I was still the Journal Star’s arena reporter — and asked for a meeting. Five people showed up and gave their spiel on why Mortenson would be the best company to do the job. And Mortenson’s track record was impressive.
Meanwhile, some of the other companies vying for the job were not even willing to be interviewed about their qualifications — not that giving press interviews has anything to do with their ability to get an arena built on time and on budget. But I was told by people on the arena selection committee that Mortenson was out wining and dining and meeting with everyone connected with the project.
Is that what won it for them? I doubt it. Their emphasis on getting projects done on time and on (or under) budget was probably the key (as indicated by the mayor), so now let’s watch and see if they can deliver.