Key West City Hall cost finalized

BY PRU SOWERS

KONK LIFE STAFF WRITER

The books are closed on the $19 million cost of building the new city hall in Key West.

City Commissioners voted 6-1 to make the final payment to contractor Burke Construction, bringing the construction cost in at $12,144,112, down from the original budget of $15 million. Another $1,719,000 was paid to project architect Bender and Associates. Additional fees for an engineering study, furniture, interior demolition, insurance, permitting fees and a $92,000 payment to the city Art in Public Places fund pushed the final cost to $19,093,660.

The final settlement with Burke does not include reimbursement to the city for almost five months in unanticipated costs paid for the rental of its temporary offices in Habana Plaza due to delays in the project completion date. Officials had hoped to move into the new building in July 2016 but several construction delays pushed that back to November. The first delay was caused by unforeseen weather delays and rain damage to the interior of the historic building on White Street. A two-month delay last summer was caused by an interior materials subcontractor that could not meet a promised delivery schedule. And Hurricane Matthew last year was blamed for another delay because some of the contractors were based in Miami and went back to the mainland to protect their businesses and homes from the storm.

At $37,500 a month in rent charged for the Habana Plaza offices, the five-month delay cost approximately $187,500, which City Manager Jim Scholl was hoping to recoup from Burke. The contract calls for the construction company to pay monetary penalties if it misses the substantial completion date for the project, including covering extra costs incurred by the city if the delays were the fault of the contractor.

But Scholl said Burke wouldn’t agree to pay the rent overage and the only way to pursue any reimbursement would have been to take the case to court. The rent reimbursement was only part of the total contract negotiation, he said.

“We had extra costs. They had extra costs,” Scholl said, adding, “Everybody is going to walk away in pretty good shape.”

Commissioner Sam Kaufman indicated at the Aug. 1 commission meeting that voting for the final settlement with Burke would avoid potential future lawsuits. Although the commissioners agreed to give Burke a final payment of $198,203, Scholl will “continue to hold the contractor’s feet to the fire” until everything is fixed as outlined in the contract, Kaufman said. Indeed, the final settlement goes into great detail to say that in return for the final payment, Burke agrees to release the city “from all manner of, action and actions, cause and causes of action, suits, debts, sums of money, accounts, bills, covenants, controversies, agreements, promises, damages (including consequential, incidental, punitive, special or other), judgments, executions, claims, liabilities and demands.”

“This is a reasonable way to put this matter behind us without exposing the city to further litigation or expenses. It just makes a lot of sense,” Kaufman said about making the final payment to Burke.

But Commissioner Margaret Romero, who was the lone vote against the final payment, said she could not agree to the settlement while there are still several things unfinished in the building. Some of that work involves minor tweaking, like adjusting the weather stripping on the front doors so they close properly. But some require more involved adjusting, such as the air conditioning that’s so cold in some parts of the building that employees wear sweaters in the middle of the summer.

“We’re still having problems with chillers. We’re having problems with plumbing. We’re having problems with finishings of floors. And those are the major ones,” complained Commissioner Margaret Romero during the discussion about the final payment to Burke. “It just sticks in my craw that we’re going to have this done… when there is still stuff that’s not working properly in this building.”

Mayor Craig Cates chose to look on the bright side of the project he shepherded through years of planning, sometimes against vocal objections and criticism, often from Romero. There are performance bonds still in place that will provide additional funding that might be needed, he said. Equipment warranties will also provide a layer of protection against any additional spending. For a project of this size, with all the accompanying delays, to come in under budget is “a huge accomplishment,” he said.

While the construction portion of the project came in at $71,000 under budget, the $19 million final cost is $200,000 over the $18.8 million adjusted budget.

“With the size of this project, there’s been a lot of naysayers that it was going to come in millions of dollars over budget and all. To come in $75,000 under the contract price is, to me, an incredible job,” Cates said.

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