A request to more than double the $12.6 million early construction budget for the massive City Springs redevelopment—and to delay setting the final budget until January—confused Sandy Springs City Council at its Oct. 6 meeting. The council put off any big decisions until its Oct. 20 meeting, when a new budget estimate will be available from Holder Construction.
The City Springs project’s schedule and overall budget—previously announced at around $220 million—are not changing, City Manager John McDonough said. The request came because Holder is struggling to estimate an updated budget due to plans that still lack details, city consultant Ennis Parker said. In turn, the budget may force significant changes to the plan—including possibly removing a surface parking lot proposed along Mount Vernon Highway.
“We’ve added scope to the project south of Mount Vernon [Highway]. We may not be able to afford that,” Parker told the council.
The confusion and the potential changes are based in the way the city chose to budget City Springs. It involves setting a hard budget cap—a “guaranteed maximum price”—and then constantly tweaking construction costs and project plans to match.
“I know everybody’s concerned we’re going to go over budget,” said Mayor Rusty Paul, promising that won’t happen, but that the City Springs design may change. “If we have to make reductions in the scope of the project, we’ll do that.”
Formerly called City Center, the City Springs project began construction this summer on a 15-acre site where Mount Vernon Highway and Johnson Ferry Road meet Roswell Road. The redevelopment, slated to finish in 2017, will include a new City Hall, apartments, commercial space, and concert and theater halls.
In June, the council approved a preliminary construction budget capped at $12.6 million, essentially to begin site preparation, with the understanding that by November, Holder would offer a full budget and the city would set in stone the guaranteed maximum price.
But on Oct. 6, Holder and city staff told the council that the full budget won’t be done until Jan. 15. In the meantime, it sought a boost in the preliminary construction budget to $27.8 million to continue working until then.
Parker said the contractor needs more budgeting time because the City Springs plans “lacked definition in the drawings,” including building interiors, exteriors and other items “not adequately described by the designers yet.”
Councilmen said they were confused and uneasy about the request. Councilman John Paulson noted the wording seemed to add to the total project cost, not just the preliminary construction budget. Councilman Tibby DeJulio questioned whether the guaranteed maximum price would be delayed again come January.
Councilmen Andy Bauman and Gabriel Sterling repeatedly noted that various line items in a budget estimate—including one that varied from $75,000 to over $1 million—“don’t add up.”
“They won’t add up,” said McDonough, explaining that is due to the ever-changing nature of the early estimated budget. A fresh budget estimate is due on Oct. 19.
Parker and Holder’s Brian Taylor said that constant shifts in costs for materials and similar aspects of the project mean constant rejiggering of the exact prices within the budget cap.
“Until you have 100 percent [complete design] documents, you don’t have 100 percent [budget] certainty,” Parker said.
The possible removal of the surface parking lot from the project—a bonus item officially added to the plan in June—surprised Councilman Graham McDonald, who said the council should be “kept as informed as possible” about such changes.
Parker apologized for the “lack of clarity” in the request. Parker and Taylor agreed to a council proposal to wait until the Oct. 20 meeting—the day after the latest budget estimate is due—to review any big changes. But in the meantime, the council authorized a $2 million boost to the preliminary construction budget as a “buffer” to make sure work can continue on the site.
The Oct. 20 meeting is also when the council is slated to approve the details of issuing up to $222 million in bonds to fund City Springs. McDonough said the budget discussions don’t affect the bond issuance.
In other City Springs business, the council approved a deal to reclaim some land from the neighboring Fidelity Bank at the corner of Johnson Ferry Road and Sandy Springs Circle. The bank acquired an easement for eight parking spaces many years ago, according to city attorney Wendell Willard. The city now needs that easement removed to gain clear title ownership of the land.
According to a letter of intent, the bank agreed to give up the easement in exchange for the city providing landscape improvements and new parking spaces at a cost of around $250,000. In addition, Fidelity gets exclusive rights to provide banking services within the future City Springs development for 15 years or until Fidelity moves out of its current building, whichever comes first. Fidelity also gets the right to place an ATM within City Springs at normal market rates.