City probes Parcel D miscue
February 26, 2004
The city is conducting an internal investigation into a snafu at its Parcel D affordable housing project that resulted in its last-minute redesign and the loss of a unit.
The city and the private developers who are building the $8 million project next to the Aspen Business Center were forced to eliminate one condo from what had been a 40-unit project in order to comply with ABC covenants.
The net cost of the changes to the complex added $6,040 to the construction bill, according to a report handed to the City Council earlier this month.
On the other hand, one city observer suggested the true cost was $146,000. The per-unit cost at Parcel D is roughly $140,000, but the city didn’t save $140,000 by scaling the project back to 39 one-bedroom condos. Instead, the reduction wound up adding $6,040 to the bottom line.
Phil Overeynder, the city’s utility director, conducted the investigation and recently circulated a draft report of his conclusions, according to Steve Barwick, city manager.
Barwick said he didn’t know if the final report would be made public. The intent of the probe, he said, is to find out what happened in the city’s first attempt at using its “developer model” for construction projects. Essentially, the city handed development of the housing project over to a private development team, selected through a design competition.
Recommended Stories For You
“I was asked to get to the bottom of who was responsible and how did this happen,” Barwick said. “Some council members individually asked for it.
“Miscommunications were a big part of it,” he added.
The city owned the 2.5-acre Parcel D site, but purchased an adjacent 15,004 square feet from Qwest to improve access to the property. The latter parcel is subject to the ABC covenants.
Part of the housing project wound up on the former Qwest parcel and was consequently held subject to the ABC covenants.
In negotiations with ABC developer John McBride, the city agreed to eliminate one unit to meet height restrictions in the covenants.
Losing one unit cut the cost of the project by an estimated $49,695. The reduction couldn’t be the full $140,000, since various elements of the building ” the foundation, for example ” didn’t change with the loss of the unit, said Ed Sadler, assistant city manager.
A more expensive stairwell design was added to the building at McBride’s request. There were also redesign costs and a few smaller items associated with the negotiations that resulted in the $6,040 net addition to the cost of the project, according to the report to the council.
In addition, the city paid $55,478 to the ABC to cover the cost of hooking into the water line in the business center and for its share of other expenses borne by the ABC when it was developed.
“I think that would have been paid anyway ” at least some of it,” Sadler said. “[McBride] paid for the installation of the water lines. He has the right to collect when somebody else wants to hook up to them. Fair is fair.”
Had the project been designed to avoid the covenants from the start, however, it’s possible the city would be getting all 40 units, Sadler said. That would have required a slightly different configuration of the project than what was proposed and approved, he said.
Council members want to know what happened, as the city anticipates contracting with a private developer for its much larger Burlingame Ranch project, according to Barwick.
“Of course, we don’t have a similar situation [there]. It’s more about the process,” he said. “We don’t have any adjacent landowners [at Burlingame] who have covenants.”
[Janet Urquhart’s e-mail address is email@example.com]