Signed Deed Moves Arts Center Project Into Evaluation Period
Written by Catherine Lackner on March 1, 2001
By Catherine Lackner
With a crucial signed deed from Knight Ridder firmly and finally in hand, the Performing Arts Center Trust is ready to begin the pre-construction process two months after the project was approved by the county commission, says Project Director Gail Thompson.
Miami-Dade County awarded an "at-risk contract" to Performing Arts Center Builders a consortium of Odebrecht Construction, the Haskell Co. and Ellis-Don Construction. The deal asks Performing Arts Center Builders to do the job for a maximum price at or below $255 million at the end of a six-month evaluation period.
That period began Feb. 21 with the transfer of the deed and the signing of a construction contract, Ms. Thompson said. The trust also will use this period to begin bidding out other contracts necessary to proceed with construction.
"The six-month period is essentially for the buyout of the trade jobs electrical, plumbing and so on," she said. "We’ll now begin bidding out the work."
The consortium will also divide the 42-month construction project into subcontract bid packages to initiate more aggressive bidding, Ms. Thompson said.
The Knight Ridder deed for land that is crucial to the center’s construction contains a reverter clause that’s strongly contingent on Performing Arts Center Builders’ estimating and negotiating skills.
The clause stipulates that if the county doesn’t execute a guaranteed maximum price agreement within 360 days after Feb. 21 or if construction doesn’t begin within 450 days of that date, ownership of the property reverts back to Knight Ridder, parent company to The Miami Herald, Ms. Thompson said.
But, she said, she’s confident those significant tasks can all be done in the time allotted.
"We’ve got plenty of room in there," she said.
Despite obvious progress toward groundbreaking on the center, the at-risk contract still leaves the county without a final price or a secured contract for at least six months.
The center’s pricetag has been a bone of contention almost since first-proposed in 1986.
Last July, the price controversy intensified when the county approved simultaneous bidding between Turner Construction, Clark Construction, Performing Arts Center Builders and Morse Diesel International.
Performing Arts Center Builders and Turner both submitted responsive bids. But Turner’s, at $332 million, was substantially higher than Performing Arts Center Builders’ $280 million.
The fact that both bids were considerably higher than the county’s original estimates prompted some to wonder if the center would ever get off the drawing board.
Simultaneous contract negotiations were again approved but Turner contends the county never resumed talks with the firm despite Turner’s willingness to do so.
Last December, former County Manager Merrett Stierheim won the commission’s approval to pursue a substantially revised contract with Performing Arts Center Builders. The target price, $255 million, is $20 million less than the company’s original bid but still $50 million above the ceiling the county set in 1999.
The new contract also allowed the county some wiggle room: if the final guaranteed maximum cost exceeds the county’s ceiling, commissioners could choose not to proceed. That would most likely restart the bidding war and push the oft-delayed construction further into the future.
The third option would be to abandon the project altogether.
Ms. Thompson said this week she’s now hopeful things will go smoothly.
"Now that the county has increased its match, we will just have the construction manager bid the jobs in accordance with the target price," she said.
Additional financing involves redirecting $22.7 million in an operating subsidy reserve toward capital financing and spending an added $45.3 million in convention development taxes $68 million in addition to the $205 million already earmarked for the project.
Part of the new optimism surrounding the project could be attributed to the guaranteed maximum price. Construction industry experts say the owner usually gets a better price with guaranteed maximum proposals than with a lump sum agreement.
Using this price approach, a construction manager provides input from a builder’s point of view on such issues as feasibility of construction, engineering and identification of long-lead procurement needs, resulting in better coordination for integrating systems.
Performing Arts Center Builders will be paid up to $2 million to review contract documents in search of discrepancies or suggested ways to cut costs by using less expensive materials that will not affect quality or contact time.