Miami Unsure Of Form Stadium Garage Contract Will Take

Written by Yudislaidy Fernandez on February 26, 2009

By Yudislaidy Fernandez
Miami’s city manager is backing away from an earlier plan to get a firm price for parking garages at the proposed Florida Marlins stadium through a manager-at-risk contract.

Pete Hernandez told city commissioners earlier this month he wanted a manager at-risk contract but now says he thinks the economic downturn makes a conventional bid award more favorable.

Plans are to build four garages and six surface lots, according to the stadium parking agreement. The parking garage and stadium contract are among five stadium-related agreements city commissioners are to vote on March 4.

Under the parking agreement, the city is to provide 5,500 to 6,000 parking spaces. Of those, 250 belong to the Marlins.

Mr. Hernandez said at a Feb. 13 meeting at which the city was to vote on the Marlins agreement he would hire a construction management-at-risk firm to ensure the project stayed within budget.

This approach could increase the current estimate, but he said he is unsure by how much.

"I don’t want to speculate," he said. "We have not made the decision to go forward with that approach."

But the weak economy is driving city officials to consider a traditional bid award. "In today’s market there will be a lot of competition to build that garage."

To finance it, Miami is counting on convention tax funds. Mr. Hernandez cited revenues other than game-day parking receipts as possible sources to cover any cost overruns.

Such revenues would come from a parking surcharge for off-season events, 50% of revenues from any advertising in the garages and from retail leasing, he said at the Feb. 13 meeting. "Even if I have to reduce the number of spaces, I am not touching the general fund," he said.

For now, the administration is sticking to a budget of $94 million, although consultants this summer projected 6,000 spaces could cost nearly $150 million.

Mr. Hernandez in the past months has conceded the $94 million figure could rise by 10% to 15%.

At the Feb. 13 meeting, he put the estimated per space cost at $15,000, though in November he cited estimates to the city commission of $16,000 to $18,000. At that price, a minimum 5,500 spaces would cost up to $99 million.

Mr. Hernandez said the payoff of a construction manager at-risk is that it comes with a guaranteed maximum price for the garage.

Kevin Callaham, construction management-at-risk expert, said this method in the past seven years has gained popularity in the public and governmental sector.

The method is based on a firm’s qualifications of previous projects and a fast delivery.

The system sets a guaranteed maximum price, which "guarantees the project won’t be more than "X’ dollars," he said.

Mr. Callaham, vice president and division manager for Orlando-based PBS&J Constructors, said the risk to the contractor is that it has to bear any added costs if materials prices escalate.

If the stadium gets city and county commissions’ approval, stadium construction could start by July, but the city wouldn’t begin building the garages until next February, Mr. Hernandez said. "We are looking at a year away." Advertisement