Loading...
HomeMy WebLinkAbout2009-12-14 10-034 ORDERCOUNCIL ACTION Item No_ .1. o 034 Date: 12-14-09 Item/Subject: ORDER, Acknowledging Receipt of the Report of the Special Committee on Arena Implementation. Responsible Department: City Council Commentary: The Special Committee on Arena Implementation has completed its final report and developed a series of recommendations for consideration by the City Council. Key elements of the report cover facility size; project phasing; a recommendation that the City proceed to contract with Sink, Combs, and Dethlefs for facility design; involvement of potential management firms in the design process; using the Construction Manager at Risk approach to construction; instituting certain cost containment approaches in the initial phase of the project to advance the start date of future phases; continued exploration of additional funding sources; annually appropriating $500,000 from the downtown TIF for the project; engaging a private management firm to operate it; and establishing an advisory board for the new facility charged with oversight of the management firm and including individuals from the public as well as those with a financial or special interest in the project. Overall, the Committee has recommended that the City immediately enter into a design contract for Phase I of the project, the new arena, that ground be broken for it no later than the summer of 2011, and that Phase II, the meeting complex, proceed as quickly as possible given funding and financial realities. The order also directs staff to work with the Council Chair to set a date for a Council Workshop to allow for further discussion and consideration of the report and its recommendations and to identify the steps that should be taken in the near term toward adopting and implementing its recommendations. Manager's Comments: Associated Information: Report of the Special Committee Budget Approval: Legal Approval: Introduced for X Passage First Reading Referral Department Head City Manager Fi ance Director City Solicitor Page _ of A 034 Assigned to Councilor — Hawes December 14, 2009 CITY OF BANGOR (TITLE.) ORDER, Acknowledging Receipt of the Report of the Special Committee on Arena Implementation. By the City Council of the City of Bangor. ORDERED, THAT the City Council hereby accepts the report of the Special Committee on Arena Implementation. BE IT FURTHER ORDERED, THAT City staff work with the Chair of the City Council to schedule, at the earliest available date, a Council Workshop, the purpose of which is to further discuss and consider the report and its recommendations and to identify the steps that should be taken in the near term toward adopting and implementing its recommendations. IN CITY COUNCIL December 14, 2009 Motion Made and Seconded for Passed CITY CLERK—'— - / Passage #10-034 (TITLE ,)_Acknowledging Receipt of the Report of the Special Committee on Arena Tmnlementation Assigned to Councilor 0 034 REPORT OF THE SPECIAL COMMITTEE ON ARENA IMPLEMENTATION DECEMBER 3, 2009 The Special Committee on Arena Implementation has been charged by the Bangor City Council with developing an implementation plan and schedule for the development of a new arena and meeting complex to replace the current Bangor Auditorium and Civic Center that covers such issues as financing the complex, its size and design, and its eventual management structure. Since it was established in April 2008, the Committee has met on numerous occasions to review background information on the Auditorium and Civic Center, prior consultant reports, and, most recently, the market, sizing, and financing report prepared by ERA/AECOM and Sink, Combs, Dethlefs. At its last several meetings, the Committee has spent considerable time discussing the size of the proposed Arena and meeting facility, those design elements that are necessary to its success, and how the project might be phased to ensure that it is undertaken in a fiscally responsible manner. After these deliberations, the Committee has concluded that it is time to take the next necessary steps to bring this project to reality. Therefore, we submit the following recommendations for Council consideration: 1. The Council accept and adopt the ERA/AECOM recommendations on the size of the proposed new Arena and Meeting Facility. As a special note, there has been considerable confusion as to the actual size of the new arena with many interpreting the recommendation for 5,400 fixed seats as indicating the new facility will be smaller than the current Auditorium. The actual recommendation calls for a facility that will seat 6,300 for basketball, 7,000 for concerts, and 7,400 for small stage events. We believe that a facility of this size, with telescopic seating for basketball and floor seating for concerts and other events, will meet Bangor's current and projected future needs. 2. The Council also accept the proposed two phased approach to this project with Phase I addressing the new arena and Phase II the expanded and renovated meeting space. Given financial realities, it may be necessary to advance this project in phases. There is unanimous agreement among Committee members that the most pressing and immediate need is to replace the Auditorium. At the same time, there is strong recognition that expanded and renovated meeting space can and should be a major addition to our economy by attracting meetings and conventions to Bangor. 3. Toward this end, we urge the Council to move as quickly as is financially feasible to implement the Phase II project including, if at all possible, beginning Phase II prior to the completion of Phase I. 4. Phase I should begin as soon as possible with the selection of an architectural firm to develop plans and specifications for a new Arena. 5. The Committee has been impressed by the creative and cost conscious approach taken by Don Dethlefs of Sink, Combs, and Dethlefs. His approach has shown that a facility that meets our needs is feasibly within our ability to pay. By locating the new Arena adjacent to the Auditorium, he has made use of existing topography, made it possible for the Auditorium to continue to operate during construction of a new facility, and allowed for the reuse of the existing Civic Center and the foundation of the Auditorium as ways to contain costs. Further, he has, for the first time, presented an overall master 51 7. A 10 034 plan for the entire Bass Park Complex that lays out a variety of additional projects that will improve and integrate the various elements of this property, Based on his vision, creativity, cost conscious approach, and experience in designing similar facilities around the Country, we unanimously recommend that the Council authorize retaining Mr. Dethlefs and his firm for the detailed design of this project and that this be done immediately. During the design phase of this project, potential facility management firms should be involved. This might best be accomplished through an arrangement between the selected design firm and one or more management firms. The Committee believes that one or more management firms may be willing to take on this task at no or low Cost in light of the potential for their selection as the facility operator. Involving a management firm will ensure that the design of the facility will meet operational needs and maximize revenue production. Throughout the design phase, value engineering principles should be applied to both the construction costs and operational costs of the facility with a goal of constructing it at a cost of less than the current estimate of $57 million. Every dollar saved in designing and constructing a new Arena will shorten the period of time when Phase II can be undertaken. The City should fully investigate and consider using the construction manager (CM) at risk system, a delivery method which entails a commitment by the construction manager to deliver the project within a guaranteed maximum price (GMP). The construction manager acts as consultant to the owner in the development and design phases, but as the equivalent of a general contractor during the construction phase. When a construction manager is bound to a GMP, the most fundamental character of the relationship is changed. In addition to acting in the owner's interest, the construction manager must manage and control construction costs to not exceed the GMP, which would be a financial hit to the CM company. Typically, a CM at Risk arrangement eliminates a "Low Bid" construction project. A GMP agreement is a typical part of the CM and Owner agreement somewhat comparable to a "Low Bid" contract, but with a number of adjustments in responsibilities required by the CM. Before design of a project is completed, the CM is involved with estimating the cost of constructing a project based on hearing from the designer and Owner what is going/desired to be built. If some aspect of desired design raises the cost estimate over the budget the Owner wants to maintain, a decision can be made to modify the design concept instead of having to spend a considerable amount of time, effort, and money re -designing and/or modifying completed construction documents, or the Owner may decide to spend more money or obtain higher financial support for the project. This approach also: maintains positive working relationships among the Owner, Architect/Designer, and Contractor and maximizes the awareness among Owner, Architect/Designer, and CM of all parties' needs and expectations in order to perform their part of the project in the most efficient manner. 9. If necessary and in order to achieve a Guaranteed Maximum Price that will allow for Phase II to be undertaken sooner rather than later, consideration may be given to deferring certain elements of the recommended Phase I project such as the enclosed walkways over Dutton Street and Main Street. 10. The potential for other funding sources should continue to be explored and pursued. 11. Once a Guaranteed Maximum Price has been accepted, the question of when Phase II becomes financially feasible should be revisited and a firm start date established. To 2 �0 Q3 ensure that this phase of the project goes forward at the earliest possible date, consideration might also be given to deferring all or a portion of the renovation costs associated with the existing Civic Center. While renovations and improvements to this building are appropriate and needed, it is functional in its current condition and a more pressing need exists for additional quality space and the removal of those portions of the Auditorium that will remain after Phase I. 12. In order to bring the entire project on line as soon as possible, the Council should consider: • Designating a portion of annual Downtown TIF revenues to the project. The Downtown TIF has performed better than original projections. Where $1.9 million was initially anticipated from this source in the current Fiscal Year, actual receipts will be $2.4 million. As the City invests in new facilities at Bass Park, we anticipate that additional development will also take place in the downtown TIF district. We recommend that at least $500,000 per year be dedicated from this source for future project costs/debt service requirements. Please note that this will also provide some potential cushion to protect the general taxpayers of the City should the projection of future years slot revenue not be met. • Consider financing all or a portion of the Phase I and Phase II projects for a period longer than 20 years. While we acknowledge that extending the debt service on the projects will have an impact on total interest costs, we believe that the projects should be undertaken as soon as possible in order to take advantage of an advantageous construction cost environment, provide a stimulus to the local construction industry, and move the economic impact, particularly of the meeting and convention facility, forward in time. 13. Given the size and scope of this project, the Council should seek state enabling legislation to exclude any borrowing associated with it from the statutory debt limit under which the City must operate. While the project could be undertaken without exceeding the limit, we do not believe that the City's future ability to undertake other capital projects should be limited by it. 14. A private management firm should be engaged to operate the facility and should be selected well in advance of the date of estimated opening. 15. The Council is encouraged to establish an Advisory Board to ensure that the management firm is held accountable and that adequate oversight is provided. Membership on the Board should be designed to ensure that those entities or organizations with a significant financial interest in the facility are represented as well as the general public and those with a significant special interest. Conclusion Overall, therefore, it is the recommendation of the Special Committee on Arena Implementation that the City immediately enter into a design contract for Phase I, that ground be broken for the Phase I project no later than the summer of 2011, and that Phase II proceed as quickly as possible given funding and financing realities. t-1