Revenue Bonds Authorized For Airport Ramp

August 30, 2007
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GRAND RAPIDS — The Kent County Board of Commissioners authorized $130 million in airport revenue bonds Thursday to support construction of a four-story parking ramp and terminal building enhancements at Gerald R. Ford International Airport. 

Airport staff had recommended Monday that the Kent County Aeronautics Board approve the low bid of nearly $118 million and award the construction contract to Christman Co. Ford International will get bond proceeds of $118 million. That amount, plus $20 million in projected airport revenues, will cover the total $138 million cost of the project, said Bruce Schedlbauer, manager of airport marketing and communications.

The project has been scrutinized of late because its original budget estimate was $120 million when airport staff initiated the design process. After completing the preliminary design and moving on to more detailed designs to prepare the project for bidding, the design consulting firm of Gresham Smith & Partners narrowed down the cost, and the last estimate going into bid was $104 million. But the bids ranged from nearly $118 million to $145 million, well beyond the cost consultants had estimated.

Aeronautics Board Chairman John Van Laar said the board was very disappointed with Gresham Smith’s cost errors. Vice Chairman Thomas O’Hare suggested the board submit a bill or get some kind of a refund from the consulting firm for underestimating the cost of the project by more than $14 million.

Larry Telkamp, Gresham Smith project manager, said he, too, was surprised that bids came in so much higher than his company had anticipated. He said “human error, misjudgments and price increases” were to blame for the foul up. Telkamp said Gresham Smith’s estimate was off for a number of reasons, including the higher cost of steel and the complexity of constructing the glass and steel, wave-like canopy connecting to the ramp. The firm also underestimated the cost of constructing sky bridges connecting the ramp and terminal, Telkamp said. He said he didn’t know how much an engineering redesign of the project would add to Gresham Smith’s $14.2 million contract with the airport. Airport staff has been meeting with representatives of Gresham Smith’s design team and the Christman Co. to identify potential ways to reduce project costs without altering the architectural design and intent of the project as it has been presented to the public, said Thomas Ecklund, the airport’s facilities director.

Ecklund said the team also wanted to make sure that any changes made would not impact the start of construction. The site work required for the relocation of the curb front to a temporary location and the work around the modified Gate 4 have to be done this fall because they’re very weather dependent, he explained.

“We also wanted to make sure that any change was not going to have a dramatic increase in operation and maintenance costs,” Ecklund told the board. “We didn’t want to try to save a half a million dollars if it was going to cost us $600,000 over the life of the project.”

The bidding called for a construction start in mid-September, Ecklund said, and if that deadline is pushed back by a month or more, it would dramatically impact the phasing of construction.

The design team came up with 43 potential changes that could shave $4.5 million off the low bid estimate and would allow the project to proceed without any changes the public could perceive, Ecklund reported. Suggested savings included elimination of the retaining walls around underground utilities, which alone would save nearly $1 million; deferment of the $700,000 gateway portion of the project; use of asphalt instead of concrete for pavement in front of the terminal building; elimination of some of the painting; and the use of different light fixtures than originally planned.

Brian Picardat, Ford International’s finance and administration director, said the capital improvement program has increased by $19 million, mostly due to the increase in bids over the original estimate for the project. But he indicated that the airport can afford the project even without making any changes.

The ramp will add 4,900 parking spaces. Upon its completion, the ramp and surface lots combined will offer more than 10,000 parking spaces. Aeronautics director James Koslosky said there hasn’t been a parking garage built at an airport that didn’t operate at 75 percent or greater after it opened. He’s not concerned about the airport’s ability to generate $20 million in revenues for the project. The airport draws 4,000 to 5,000 vehicles and serves 8,000 to 10,000 flying customers and visitors per day, he said, and this is a very healthy and resilient air service market.

Koslosky also stressed that given the vagaries of Michigan weather, the sky bridges and canopy that will connect the ramp to the terminal are not luxuries — they’re necessities that provide for a safe customer traveling experience in and out of the airport, he said.    

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