Finance Committee - 11/18/2020 Page 11
And it was done pretty much that wouldn't affect or feel anything in terms of the Performing Arts Center. There
were two items that | thought warranted discussion. One was the loss of the second elevator and the second
was some material that will be used on the outside of the building.
But | wanted to make sure the Steering Committee was well aware of, so we had that discussion to understand
those were some of the trade-offs necessary to keep this project on track. It is completely designed, there’s no
need for a design contingency any further. The total project is $25 million. This is just hard construction
figures. There’s two contingencies it should be noted with this project. There’s one for our construction
contingency, there’s also an additional owner’s contingency on this project. And there’s also some escalation
built in as well, approximately $200,000.00/$250,000.00 in escalation.
Why do | mention all of this? Because we put this out to bid in August, we put this out to bid while we were in
the middle of trying to understand whether we were going to achieve the New Market Tax Credit. We knew
that closing of the New Market Tax Credit was going to take some time so we need the prices to be held. And
we have the prices being held until December 30". There’s been a lot of moving parts over the last few weeks
to try to bring this to the point that it’s at now. We thought it was prudent to get a number locked in, and then if
we needed to we could do a change order and take some from Owner's Contingency or Escalation if
necessary, but that’s proven not to be the case as all the bidders so far have indicated that they are going to
be holding their prices until we can get them under contract, which, if we close on December 15", we'd be
looking to put them under contract sometime right after that closing.
So, | need this to be approved this evening so we can move this on and show it as part of the project for the
New Market Tax Credit deal as it is part of the paperwork for that transaction. That’s all | have at this time,
Mayor. Thank you.
Mayor Donchess
Alright, any members of the Committee have any questions or comments for Mr. Cummings? Alderwoman
Lu?
Alderwoman Lu
Yes, | do. Thank you, Mr. Chairman. Through you to Director Cummings, one small question | have is the
escalation or escalator. I’m not familiar with that term. Could you just tell me what you mean by that?
Director Cummings
It is a built-in figure so if the prices do change for any reason, materials go up, labor costs go up, it’s a
guaranteed maximum price. So the construction manager, particularly wnen you have a long window before
you get authorization to proceed, they will build in an escalator to ensure that there’s enough money available.
That, you know, whether you put it in contingency or you have it as an escalator, Harvey has both built into the
contract.
Alderwoman Lu
And how are they different, an escalator?
Director Cummings
It’s just separate categories. | mean I’m sure there’s a more specific, more detailed answer in terms of
construction contingency as opposed to an escalator. | mean the escalator is there if need be, if you want to
draw upon it because a number goes. It’s very similar to construction contingency.
