A fee dispute has brought years of planning and engineering work on the proposed Tanger Center for the Performing Arts to a standstill.
City of Greensboro officials notified council members Friday that negotiations for a guaranteed maximum price for site preparation have broken down with Skanska Rentenbach, the construction firm selected in 2014 to serve as the project’s construction manager at risk.
Greensboro’s City Council voted in late April to split work on the delayed project into two phases. Phase I work was approved by council in April and was to include site preparation for a fee not to exceed $2.5 million.
Greensboro Coliseum Director Matt Brown notified council on Friday that the contract negotiations had broken off because Skanska Rentenbach is unwilling to remove two sets of fees from their Phase I proposal.
It’s been obvious through constant review of emails and public records that agreement on a guaranteed maximum price for the project was always going to be difficult. The $78 million TPAC is being built utilizing a public-private partnership, overseen by Coliseum Director Brown, but funded half by private donations and half from public funds. An email trove requested by Margaret Moffett of the News and Record that was released in April revealed deep divisions between the goals of the private fundraisers and the construction realities faced by Brown and the engineers developing pre-construction plans.
Moffett’s reporting caused project boosters to rush a vote on Phase I construction in April in order that a public groundbreaking could be held. This public show was despite the fact that no contract was in place with Skanska Rentenbach to perform the work.
During that meeting city officials made clear that agreement on the price was not yet at hand. Mayor Nancy Vaughan went so far as to tell Matt Brown to make sure Skanska understood the city was not opposed to breaking off and starting from scratch with a new firm.
After exchanging letters in the first weeks of May with Skanska, Brown notified council on Friday of the need to put out the Phase I work for a new round of bids.
“We continue to object to Skanska’s intentions to include allocations for Professional Fees within their General Condition costs which are defined as Scope of Work related to Phase 2,” Brown wrote. “We believe that Skanska is contractually obligated to perform the Phase 2 Scope of Work under their current Pre Construction Services Contract with us.”
“Of equal concern, is Skanska’s attempts to assert that their proposed Phase 1 GMP Document would supersede their existing Pre Construction Services Contract (they recently dropped this request) or the State Construction Management Contract which would take affect with the approval of the GMP.”
That despite three years of work and planning the city and Skanska cannot agree to pricing of final project plans is a deeper sign of the complexities plaguing the $78 million performing arts center concept.
City negotiators were able to reduce Skanska’s Phase I proposal from $2.7 million to $2.23 million but continued to object to the firm’s demands to be paid a portion of overall project management fees as part of Phase I scope of work. Brown asked the firm to remove those fees in a May 10 letter, but received a firm “no” the next day.
“Please note that the general condition costs, as submitted, accurately reflect the costs associated with performing our responsibilities for Phase I work. Therefore we will not be revising our GMP #1,” the firm’s May 11 letter stated.
Brown notes in his memo to council that several attempts had been made to reach agreements and that Skanska was responsible for “unreasonable delays.”
City staff prepared new bid specifications and documents that carry a June 20 deadline.
“Staff projects that City Bids for Proposed Phase I Scope of Work will be less than the City of Greensboro’s $2.5M authorization and well below Skanska’s Phase I GMP,” Brown wrote.
Brown’s May 10 letter to Skanska indicates the city’s position that the firm is still responsible for the completion of the project under an existing Pre-Construction Services Contract.
The city expects the firm to “provide us with a Proposed Phase 2 GMP to construct the building and its facilities.