A project still in flux — notes for Mayor & Board meeting

Mr Mayor, Aldermen: This remains a project in flux, still largely undefined nearly two and a half years after the first City-Plamondon Memorandum of Understanding (MOU) of December 2015. According to the schedule attached as Appendix F to the first MOU there was supposed to be a “definitive agreement on construction, development and financing” called a Master Joint Development And Financing Agreement (MJDAFA) within nine months — by September 2016.

29 months later such clarity still eludes those managing this project.

The MOU reflects lots of uncertainties, issues still to be nailed down.

  1. One apparent improvement is the new number of public spending $17.5m versus $31m previously. But how solid is that number? What is it based on. The package doesn’t say. It looks to me like a PR number.
  1. In the first MOU the City was going to build the conference center at a cost of $13m. Now instead the City is asked to do the underground work — build the foundations, and the basement parking garage whose roof will be a ‘podium’ or large structural slab on top of which the whole hotel/conference center complex will be built.  $11.5m is supposed to  cover that, an item called ‘On-site development.’  Again we have no idea of how solid that cost figure is? Detailed engineering design has not yet been done so the number is probably quite rough, and liable to change.

An other uncertainty is whether the parking garage will be one level or two levels. That could nearly double the cost.

  1. The City would take on paying for the riskiest and most difficult part of construction. Until today the MOU spelled out that the City would “bear the construction and financial risk” of the City portion underground. That flatly contradicted the executive summary. So at 3:40pm today a new revised MOU  was rushed out. Just hours ago an MOU was posted in which this provision was struck out. What chaos! What mismanagement!

Of course if the risk is transferred to the developer, as this afternoon’s version states, then he will have to charge the City a larger contingency provision. What will his bankers say about him taking on the financial risk of the City’s portion of the project without a major hike in contingency provisions.

And the more risk the developer assumes the more important it is to understand the viability of this project. The last publicly available market study for this project was published in 2013 based on 2010 and 2012 data. The MOU should provide for transparency. The developer wants the public to share in the costs of his project. He should share his updated market study and make clear the risks he is taking.

  1. The site plan in Appendix A of the MOU is unworkable. It was submitted to the Planning Commission for staff comment last November. It has twin two-way driveways off Patrick St quite close to the Carroll St intersection. And it provides for truck loading docks for delivery and trash located right next to the only entrance to the parking deck. Lacking a turnaround big trucks wouid have to back down  a narrow sloping ramp shared with cars going to and from the parking garage. That’s just two of some 25 problems which City staff found in comments made late last year. In six months since the applicants have failed to respond to the staff-identified problems in the site plan. Instead of replying to City staff they just put that problematic site plan in the MOU as Appendix A for your endorsement. If you endorse this MOU you are endorsing a site plan that City engineering and planning staff have, in effect, declared unworkable. That site plan should not be there in Appendix A.
  1. The boundaries of the site are still not set. More uncertainty. The MOU has mention of negotiations to buy extra real estate, adjacent property.  Of course with different boundaries there will be new plans, new costing, perhaps a different split of public and private costs. New complications. There will be new renderings. Maybe they have to go back to the HPC again?
  1. State law requires fair and open competitive procurement for projects getting state funds.  The procurement was a mess. A two-stage competition-friendly procurement proposed by city consultants JLL and presented in the last public meeting in the summer of 2013 was jettisoned in the 2013/2014 winter in favor of a single stage insider fix. The winning proposal was submitted, worked on by City staff and the Hotel Advisory Committee weeks before the RFP14J was even issued. RFP14J itself originated as a Plamondon draft according to JLL invoicing timesheets.

City staff say in response to Public Information Act requests that they cannot locate any of the communications relating to the issuance of RFP14J in February 2014. This I believe is an attempt to cover-up the details of a scandalous non-competitive procurement, an insider fix. Under state law the Board of Public Works is required to withhold state funds from this project on account of the non-competitive nature of the procurement.

This MOU however assumes state money which is extremely doubtful on account of the corrupt procurement which the Board of Public Works will be given in great detail.

Conclusion: This project is a serious mess.  Why would the MOU brought to you in this state of uncertainty with so many unknowns? Perhaps there is some significance to the fact that the old MOU gave the Plamondon company 30 months to negotiate the master Joint Development agreement. For 30 months he had an exclusive right to negotiate the details of all these City favors. That 30 months is up on Saturday. 30 months is what  they asked for and what they got. Why give them more time?

This is the botched legacy of the McClement administration and an earlier board of aldermen.  You have no obligation to pick up this mess. The new MOU proposes mucking around in the flood plain spending unknown millions of public dollars to build a small parking garage and a large structured podium for this so-called upscale hotel that is a chamber of commerce priority. I submit we have higher priorities, better uses for taxpayer money.

HEADS: Project still in flux

  1. Basis for $17.5m
  2. Garage/podium $11.5m? 1 or 2 levels, 2 could double the cost
  3. City risk – has to cost us more in contingency fee if Plamondon assum ing risk
  4. site plan unworkable
  5. boundaries of site not set
  6. insider fix jeopardizes state funding, law requires open competitive procurement

Why now with such uncertainty 30 months up

I submit we have higher priorities, better uses for taxpayer money.

NOTE: only snatches of this were actually used in speaking. 2018.06.22

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