The city of Fort Worth’s mission: Consolidate 13 city buildings into a new, fully renovated City Hall.
Its budget: $180 million.
A little more than a year since the project started, the city has spent $73.1 million — using more than 90% of that sum to purchase the former Pier 1 headquarters building. The move was billed as a cost-saving measure, ensuring Fort Worth would not have to build a new City Hall from scratch.
City leaders had earlier considered doing just that but estimated it would cost well over $200 million.
How is Fort Worth paying for the new city hall?
- 2021 A&B Tax Notes:$100,000,000
- ARPA: $6,400,000
- PEG (Public, Educational, and Governmental Broadcast): $8,500,000
- Operational: $2,000,000
- Proposed 2022 Tax Notes: $ 59,759,000
- Unfunded: $ 3,849,945
“In this case, you already have an existing, very quality shell,” Glen Hahn, president and CEO of Innovative Developers, Inc., said. “It has good bones, good structural systems, and it has recent fire sprinkler systems, air conditioning systems, the electrical systems, they’re all recent codes.”
The new building has about 160,000 more square feet than the old City Hall and increased parking availability. But with all that space comes plenty of construction to complete before a late 2023 to early 2024 deadline. Supply chain issues are likely to complicate the timeline further.
“We’re dealing with the challenges that every other part of the economy is facing,” Dana Burghdoff, assistant city manager, told council members in a May 17 work session.
The city has signed contracts with two companies so far: Boka Powell, an architectural firm with offices across several Texas cities in charge of completing design and construction plans, and Athenian Group, a Houston-based advisory firm tasked with managing the project.
The project has spent about $3.6 million on design services, pre-construction services, basic IT infrastructure, critical major maintenance components to the building (full roofing replacement), and other support/testing services, according to Tanyan Farley, who is overseeing the project for Athenian Group.
Both companies are required to submit invoices every 30 days to the city for the work they’ve completed. The Report requested these invoices to gain a better understanding of how the city’s money is being spent, the responsibilities of each contractor and how far along the project is.
Boka Powell’s work split into five stages
The city’s contract with Boka Powell stipulates the firm will be paid a percentage of its total fee — not to exceed $5.46 million — as it progresses through five different stages.
The stages and their costs are:
- Completion of programming and schematic design ($868,575.47).
- Completion of design development and opinion of probable construction cost ($1,346,216.20).
- Completion of construction documents and opinion of probable construction cost ($1,627,904.19).
- Action by City Council to accept bids.
- Final acceptance of the project by the city.
The remaining costs are for assessing the existing building ($25,850), stakeholder engagement ($295,000), furniture selection services (366,500), and construction administration (930,233.14).
The firm last submitted an invoice April 14, which detailed services rendered from March 1 to March 31. Boka Powell reported stakeholder engagement was 43% complete, programming was 50% complete, the assessment of the existing building was 21% complete, and the remaining stages had not been started.
Boka Powell has reported earnings of $193,526 from the project since it started work. The company is also eligible for several reimbursements, including for the cost of printing and consulting, which total $1,461.70.
Including reimbursements, Boka Powell has received $194,987 for the work it has completed so far. The invoice was approved April 14 by city architect Brian Glass.
Athenian Group earns majority of money early
Boka Powell’s earnings pale in comparison to the early amount Athenian Group has reported. Athenian Group, which began working for the city on the new city hall project in April of 2021, has seen its role shift and expand as the project gains speed.
Athenian Group, in the first months of its contract, primarily helped set up subcommittee workshops, provided weekly assessments and analysis, and drafted a programming scope and cost plan. This phase was called assessment. From April to mid July, the company reported $95,750 in invoices.
On July 15, the company invoiced the city $64,300 for the services of a program manager, subject matter expert, and project communications manager collectively. Athenian Group expanded the team next month, billing the city for the services of a program manager, two types of subject matter experts, project communications analysts, as well as programming and pre-design resources. That month cost the city $165,600.
Monthly costs continued to rise throughout 2021 as Athenian Group shifted focus from assessment to program management. The company invoiced the city $185,005 from Dec. 6, 2021 to Jan. 5, 2022.
In 2022, the largest invoice came in March, for $251,921.03. In addition to staff, the invoice included the cost of a furniture surplus inventory program and pre-design resources.
Athenian Group reported its most recent invoice for April at $181,400. In total, the company has received approximately $1,950,118 over the last year.
Supply chain issues could complicate construction
The last presentation on the project to the City Council was given May 17, when project leaders updated council members on anticipated costs and what had been achieved.
Farley, who is overseeing the project for Athenian Group, said they are finalizing negotiations with a construction manager to begin work on many parts of the project, which they anticipate will bring opportunities for local vendors to participate in the project. Project leaders expect to send a contract to the council May 24.
A construction manager at risk is when an entity, in this case the city, hires a construction firm and design firm separately, making it so there is no contractual relationship between the construction and design firms. The construction firm advises the design firm, acting similarly to a general contractor during construction, and negotiates a maximum price with the city for the design.
“By sitting on the same side as the owner, we can help them create a design that is cost effective,” Hahn said. “If you just let architects go, they’re not necessarily designing based on cost, they’re designing based on utilization and quality.”
The chosen construction manager at risk will provide pre-construction services, including reviews on the feasibility of design plans, engineering recommendations and estimating services fees, according to a request for proposals released by the city last year. Hahn said a good construction manager at risk will be able to save the city money while providing quality work.
But the project is already battling a familiar foe in the development sphere: supply chain issues. Because of those challenges, Farley said the timeline of the project has changed.
Initially, the new council chambers were set to be completed in spring or summer of 2023. Now, they are scheduled to be completed in fall of 2023.
While the project’s anticipated costs have remained steady, the city has not developed a plan to fill a $3.8 million funding gap. That gap is also likely to slow down progress, Farley said.
“Going short-handed is going to be very difficult, and I will continue to ask for help as we move along in that direction,” he said.
An experienced construction manager at risk should be able to help mitigate problems caused by supply chain shortages, Hahn said, by tweaking designs to use different materials as needed.
“The construction manager at risk has an opportunity to use their experiences, use their history, use their ability to solve a problem like that in a practical way,” he said.
Emily Wolf is a government accountability reporter for the Fort Worth Report. Contact her at emily.wolf@fortworthreport.org or via Twitter.
At the Fort Worth Report, news decisions are made independently of our board members and financial supporters. Read more about our editorial independence policy here.
Noncommercial entities may republish our articles for free by following our guidelines. For commercial licensing, please email hello@fortworthreport.org.
