Consultant's misestimate turns San Diego park redesign into pricey mess

31 January 2019 Consulting.us

Plans to redesign an area of San Diego, California’s Balboa Park might be pedestrian-friendly, but they’re most certainly cost-prohibitive. Bids from several construction companies have arrived with sky-high price tags attached.

On the advice of a consultant, who two years ago estimated the cost of the project to run close to $60 million, San Diego’s City Council approved a budget of $78 million – adding extra money for management and contingency costs – for the overhaul of Balboa Park’s Plaza de Panama, an open space surrounded by several museums including the Timken Museum of Art.

The Plaza de Panama project is a public-private partnership between the city of San Diego and the non-profit Plaza de Panama Committee. The city is responsible for $49 million, with the committee picking up the rest of the bill, including any additional incurred costs.

The Plaza de Panama in Balboa Park

The project would create 6.3 acres of parkland, move parking locations from two additional plazas, construct an underground parking garage with a landscaped rooftop, and make several other changes with public access in mind. It was a hard-struck deal, one that has been mired in controversy and legal troubles since its proposition in 2012. During these years, labor and steel costs have risen. The US building material industry is also on the rise, growing to $1.16 billion in 2017, meaning other building materials have as well become more expensive.

Enter the bids from three local construction companies. The lowest cited $83.5 million for construction alone. The two others are higher, at $88.4 million and $105 million. These numbers soar when additional potential costs are added. “In order to award the construction contract, the City Council would need to authorize any total project cost above $75 million,” Christina Chadwick, a spokeswoman for San Diego mayor Kevin Faulconer, said in an interview with the San Diego Tribune.

The city will review each of the construction company’s bids. If it decides to proceed with the project, which had an initial June 2021 completion date, the city will go with the company offering the “lowest qualified bid,” according to KPBS, a San Diego-area public broadcasting service.

There are ways both the committee and the city can back out of the deal, such as mutual agreement that the bids are too expensive. For now, however, neither side has made that call. The Plaza de Panama Committee stands by the project and hopes to see it come to fruition.

“We think it’s a worthy project or we wouldn’t be partnering with the city to make it happen,” Jim Kidrick, a committee member and CEO of the San Diego Air & Space Museum,” told KPBS.