Project's costs grow; worries arise over who will pay bill

0 Comments | La Crosse Tribune, May 1, 2009 | by Marcus, Samantha

La Crosse Board of Public Works members this week bemoaned an invoice for $48,000 that Included costs to coordinate the shell of the Grand River Station with the interior.

They'll add it to the pile of bills in the growing debate over who'll pay for changes to the $23 million transit center.

The city is building the shell, while developer Gorman & Co. will finish the interior.

But Gorman so far has not committed to reimburse the city for costs associated with coordinating the two phases.

"We either address the invoices as they come, or we just pay them and wait for a day of reckoning," said council and board member Dick Swantz.

Tony Hutchens, the city's assistant director of public works, couldn't say just how much money is at issue.

"It's really kind of all over the place," he said, "and that's what concerns us.

It would be easy to exclude Gorman from the conversation, build an empty shell and hand over the keys, but that's wasting the develop er 's money and jeopardizing its ability to turn a profit, he noted.

"We're trying to accommodate them, rather than the city putting in something that will be completely useless to Gorman," he said. "If we've got to put a pipe in, for example, we might as well put it where it works best for them."

But more and more of those items are hanging out there, and Gorman is dragging its feet, officials said. A Gorman representative did not return calls Thursday.

Some of those invoices are architect's fees for redesigning the building to accommodate 92 rather than 60 housing units.

They're not just squeezing the 90 into the space for 60. Gorman's changing the number of floors, and how the building is put together - where the plumbing goes, where elevators are and how much electricity is needed, Hutchens said.

"The city's going more and more out on a limb by going forward with this work without having the developer approve the work," he added.

La Crosse officials aren't expecting Gorman to acquiesce.

"I suspect it's going to be a fight," Hutchens said. "Every penny is going to be important to both sides - to the city, to be able to pay back the TIF, and to Gorman, to be able to come out of this as a profitable venture."

But a developer requested change to the project could provide a bargaining chip for the city.

La Crosse officials likely will include the coordination costs in its private negotiations with the developer over converting the planned condominiums to apartments for some period of time.

"It does help us with getting in some things that we would like to see on the agreement, too, or at least it has the potential to do it," Hutchens said.