Mike Lawrence: Let the buyer prepare

Contractors market makes high costs the norm

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Mike Lawrence

Call Mike Lawrence at 871-4203 or e-mail mlawrence@steamboatpilot.com.

— Chris Painter is smiling just about every time I see her - that's the kind of person she is, as anybody who knows her knows - but on Tuesday, I'm certain I saw her frown, if only a little bit.

I asked her whether she was nervous about potential construction costs for the $11.4 million expansion of Bud Werner Memorial Library. Painter is director of the library, and had just read about the $4 million bid for construction of the new Steamboat Springs Community Center - a price tag that "shocked and embarrassed" city staff.

The community center's total budget was just less than $3 million at the time of the bid. If a $3 million project came in at $4 million, during a period of booming local construction that is giving contractors more bargaining leverage than an ice cream vendor on a desert island, who knows what the massive library project could actually cost.

Yes, Painter said, she is nervous.

But she is also planning ahead.

"We want to be certain we're designing the building with alternatives in mind," Painter said. She spoke to the Routt County Board of Commissioners on Monday about an application for a $500,000 state grant to supplement costs higher than the $11.4 million approved by voters in 2005. Library officials will pursue other grants as well, along with matching private donations. Sections of the 23,400-square-foot library expansion will be priced separately, Painter said, to allow for cuts to the project should construction prices continue to rise.

Painter hopes such cuts won't be needed.

The classified section of today's Steamboat Today contains the first edition of an ad for a construction manager/general contractor to manage "pre-construction services," such as pricing, design analysis and technical engineering input, for the library expansion.

Painter said she and the library's board of directors plan to involve the expansion's general contractor before the project's design is complete. They are also enlisting the services of a cost-estimating and design team, which Painter said is "acutely aware" of the current construction market.

Paul Barry of Oak Creek's Barry Construction Management is part of that team.

Barry is currently working on the Routt County Justice Center, a challenging, large-scale project involving a tunnel through wetlands to the Routt County Jail. Insert whatever leaky-tunnel, scuba-diving-inmates joke you want, but Barry probably knows a thing or two about price estimates and tackling difficult construction scenarios.

City and Routt County officials collaboratively hired a construction site management inspector in 2006. On Tuesday, city and county officials agreed to hire more construction management staff to work with projects in downtown Steamboat and at the base area.

"Things change so quickly - the real problem is that contractors don't need the work right now," City Council President Susan Dellinger said.

Deputy City Manager Wendy DuBord, who is leading the community center project, agreed that Steamboat's rampant development has created a contractors' market.

"There's just not enough people - nobody's looking for work," DuBord said.

Dellinger clarified that because the three bids for the community center came in at about $4.1 million, $4.2 million and $4.3 million, she doesn't think contractors deliberately drove up the price.

"They're too close," she said of the bids. "I don't think they're lying."

But Economics 101 will tell you that high demand and low supply means high prices.

"It's going to be a problem for a while," Dellinger said. "It's something we're going to have to be aware of for some time when we bid big projects."

Painter said library officials hope to hire a general contractor in mid-April, in preparation for design completion and bid proposals "probably in May." She didn't speculate what features of the library expansion could be cut in a worst-case scenario of high costs.

"It's definitely a boom economy for construction," Painter said with a sigh.

And then one of the sunniest people in Steamboat frowned - if only a little bit.

Call MIke Lawrence at 871-4203 or e-mail mlawrence@steamboatpilot.com

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