The Register-Guard – February 7, 2009 – By Greg Bolt –
Hundreds of people could be put to work on the job that breaks ground today.
Much-awaited cash is finally starting to flow from the University of Oregon’s huge arena project with the start of what will be more than $100 million in construction spending under way.
About $25 million in subcontracts recently have been awarded for excavation, shoring and concrete work, with bids for an additional $35 million in work under review. Bids are currently being solicited for an added $70 million in contracts covering the middle and later stages of construction.
The spending is expected to pump millions of dollars into local and Oregon businesses just as the recession is biting ever deeper into the state economy and job market. It is estimated that upward of 450 people will be working on the arena during the peak construction period.
A ceremonial groundbreaking is scheduled to be held this morning at the construction site, but the event is not open to the public due to space limits, a UO announcement said.
Work is getting started months later than the university had hoped, and excavation and shoring crews are working overtime to catch up. The $227 million, 12,500-seat arena faced numerous hurdles and objections before finally gaining necessary approvals last fall.
The overall construction cost of the arena is $200 million, plus $27 million for the cost of acquiring property for the site. About two-thirds of the construction cost will go to “hard” costs such as concrete pouring and steel assembly, and the rest for “soft” costs such as design work, contingency funds, bond costs, permits and insurance.
Also, an $18 million underground parking garage is being built under a separate contract but as part of the arena project. The garage will be used for general university parking as well as arena events.
All the construction spending should provide some boost to the local economy, although it’s not clear yet how many Lane County firms will win contracts. All construction subcontracts are being done through competitive bidding, and as a public project the arena contractors are required to pay prevailing wages.
Even if much of the work is awarded to larger firms from outside the area, many local workers are expected to be employed. Workers who come from out of the area can also boost the local economy through spending they do while they’re in the area during the almost two years it will take to finish the project.
The first two subcontracts went to regional companies not based in Lane County. K and E Excavating of Salem was given a contract for earth work, and D.J. Scheffler Inc. is doing the shoring work in preparation for pouring foundations.
Scheffler has a regional office in Vancouver, Wash., and corporate headquarters in Pomona, Calif.
A contract for concrete work is in the process of being finalized. Kacie Renc, who works for JMI Sports and is the arena project executive, said she can’t name the contractor or amount until the deal is signed but said the three contracts together total about $25 million.
Renc said that so far, with the exception of the concrete contract, bids are coming in lower than expected because businesses are hungry for work. She believes that will continue as more bids are reviewed.
“It’s a really terrific environment for us right now, and there are a lot of interested bidders,” she said. “We’re very optimistic. We certainly saw savings in our first bid package with earth work and shoring.”
It’s too early to say how much less than estimated the work ultimately will cost, Renc said. But she said another JMI project, building a spring training facility for the Cincinnati Reds baseball team, is coming in 15 percent below estimates across the board.
She called it both surprising and disappointing that the concrete bid came in slightly above estimates and attributed it to the way the recession is spreading.
“You turn on the news today and you see the recession has hit everywhere and people are hungry and prices have come down, but we didn’t actually see the savings in concrete that we were all cautiously optimistic that we would see,” Renc said. “The state of the economy with respect to construction is kind of more starting in the middle of the country and moving out to the coasts.”
But, she added, “We’re still thinking that this is definitely going to come in under budget.”
Because the state’s competitive bidding rules are being used, the project managers can’t give any special consideration to Lane County companies. But Renc said Hoffman Construction, the main construction manager, is working with the UO to ensure that local companies and firms the university has worked with in the past are kept informed of available subcontracts and have the opportunity to submit bids.
Hoffman also is complying with state rules that encourage contracting with businesses owned by women and minorities and with emerging businesses, she said.
Crews are working Monday through Saturday on site preparation to meet the goal of having the arena open at least in time for the start of the Pac-10 basketball season in early 2011. The UO had hoped to have it open in time for exhibition games in late 2010 but the time needed to get a conditional use permit and other approvals is likely to push the opening date back.
“We’re putting in overtime now in order to catch up on the schedule because that 2010-2011 basketball season is without question our goal date,” Renc said. “We’re working fast and furious toward that. We’re finally able to run. No more walking.”