Cost overuns, missing records mar Kennedy-King construction

  • By Peter Sachs
  • Staff Writer
  • June 02, 2009 @ 7:00 AM

Construction of the new Kennedy-King College campus is more than $110 million over its original budget, and officials can't explain why or locate key documents that could shed light on the spiraling costs.

Project documents obtained by the Daily News also provide little explanation for the overruns on the taxpayer-financed project.

The campus, now open for almost two years, has brought a surge of life to the Englewood neighborhood, with its brick buildings, state-of-the-art classrooms, television studios and a restaurant.

Outgoing City Colleges Chancellor Wayne Watson considers the new campus one of his greatest achievements.

In early 2005, the Public Building Commission, which oversaw the project, estimated it would cost $93 million.

But by the end of 2006, with construction barely started, the price tag had soared to $202 million. And at a recent City Colleges board meeting, vice chancellor Diane Minor said the total cost would climb higher once the bills for months of repairs to get the campus’ heating and ventilation systems working correctly are tallied.

The City Colleges referred questions about the project's cost to the PBC, a city agency that coordinates and manages construction projects such as schools, libraries and fire stations. The chairman of its board is Mayor Richard M. Daley.

“The Public Building Commission managed the construction process, and so they would have to be the ones to comment or discuss the construction of the college,” says Elsa Tullos, the City Colleges spokeswoman.

Watson declined to speak to the Daily News, and, through his assistant, referred questions back to Tullos.

Officials at the PBC were unable to explain how the construction costs more than doubled.

“That predates me,” PBC spokesman Kevin Smith says.

Bid documents, change orders and minutes of PBC public meetings obtained by the Daily News under the state's Freedom of Information Act offer little information on how the project’s contractors were selected and why costs spiraled so rapidly.

Other records that would shed light on the matter are simply missing, the PBC says.

Laurence Msall, president of the Civic Federation, a non-partisan organization that advocates for governmental efficiency, says government agencies have an obligation to keep track of and justify their spending, particularly in tough economic times.

“Certainly with change orders in the millions of dollars, public agencies should justify the explanation for the changes and have some disclosure as to the reason for the changes," he says. “We would call on the City Colleges and the Public Building Commission to provide detailed information that justifies such enormous changes in these projects.”

Much of the funding for Kennedy-King came from bonds the city of Chicago issued in 1999, loans that must be repaid by taxpayers. About $20 million came from the city’s tax increment dollars -- tax dollars used for redevelopment.

In early 2005, the Public Building Commission asked companies to bid on what they’d charge to oversee construction. Four groups of companies responded, quoting prices of $7.4 million to $13 million to manage the project.

Of the four companies who responded to the PBC, one provided an early indication of problems to come.

“We do not believe $93M is sufficient to construct the project as currently designed,” construction management firm Gilbane wrote to the PBC.

The PBC ranked Gilbane last among the four companies, saying its quote to manage the project was too high.

McClier, a project management and architectural firm based in Chicago, now owned by the global construction giant Aecom, won the project with its $7.4 million bid, which included a $1.6 million management fee.

As the construction manager, McClier not only coordinated all aspects of the project but served as general contractor and accountant, soliciting bids from contractors who would do the actual construction and working closely with the project’s architects.

Minutes from the PBC's board meetings in 2005 and 2006 indicate that the board approved additional charges from McClier and Kennedy King Associates, the architectural firm, that each ranged from $30,000 to $513,000. The minutes do not explain what any of the charges were for.

Notes from a Sept. 22, 2005 meeting between officials from McClier and the PBC indicate that everyone was looking to save costs.

The notes refer to a “project budget gap” of $30 million to $40 million. Officials considered shrinking WYCC’s studios, the culinary school kitchens, the library and the child care facilities.

But the records don’t indicate what decision was made, or exactly how the budget gap emerged.

A March 2006 change order increased the payout to McClier by $3.5 million as the company was assigned to do design work on WYCC’s television facilities and the computer network campus-wide. The change order notes that the original budget had been expanded by $29.3 million, but does not provide details.

Then in June 2006, a $4.4 million change order included higher fees for McClier.

Finally, in November 2006, the PBC signed the largest of the four change orders on the construction project.

“This Amendment represents the completed negotiations” between the PBC and McClier, it said.

The bottom line: Kennedy-King would cost $202 million. And by the time the change order had been signed, construction had been in progress for more than a year.

With labor, design work and other costs, the PBC would end up shelling out $12 million to McClier, or 62 percent more than what the company had bid 18 months earlier.

The PBC did not produce any documents detailing the negotiations between it and McClier that raised the price to $202 million.

Additional costs, such as furniture, computers, new television studio equipment and other finishing touches, as well as a lengthy list of items that needed fixing, has brought the total cost of the project higher, though the City Colleges has not released detailed financial information on the project. When the Daily News requested documents from the City Colleges related to Kennedy-King, that request was referred to the PBC.

Elizabeth Harris-Wright, the PBC’s public records officer, says many employees who worked on the project in 2005 and 2006 had left the department, and many documents had been moved to different locations, both in the office and off-site.

In an April 28 letter, Harris-Wright wrote that “the requested records have not been located in the course of routine search and additional efforts are being made to locate them.”

More than two weeks later, on May 14, Harris-Wright provided the scoring criteria used to choose a construction manager for the project. The Daily News had also requested letters that gave McClier permission to keep spending on the project. But in a cover letter, Harris-Wright wrote, “We have not been able to find any additional documents that you have requested. We have concluded our search.”


Daily News Staff Writer Peter Sachs covers higher education. He can be reached at 773.362.5002, ext. 18, or peter [at] chitowndailynews [dot] org.