City Manager Speaks to Waterfront Development Budget Update


waterfrontTHUNDER BAY – On Monday, Feb. 14, a Waterfront Development progress and budget update (Corporate Report 2011.003) will be presented to City Council’s Committee of the Whole. The report recommends approval of a revised total budget for Prince Arthur’s Landing – Phase 1 of Waterfront Development.

This is an important initiative for our community, and it is important for the community to understand the facts about this complex, multi-faceted project.

For example, the increase in the Phase 1 budget involves reallocating available City funds from Phase 2 – that is funds already set aside. As well, the revised budget allows us to complete an ambitious five years worth of work in an two year time frame.

I know the community has many questions about the proposed budget increase and where we are at with the Waterfront project, and the following provides some key questions and answers.

What is the proposed revised budget for Prince Arthur’s Landing?

The proposed revised budget to complete Phase 1 – Prince Arthur’s Landing is $57.9 million an increase of $8.6 million or approximately 17% over the approved 2010 budget of $49.3 million.

Why does the Phase 1 Waterfront budget need to be increased?

Without the $29.3 million in funding from the Infrastructure Stimulus Fund Prince Arthur’s Landing would have taken many years to complete. That said, the tight timeline has presented challenges to the project, which was designed to be completed in five years. The $4 Billion in ISF has resulted in increased bid prices and the total number of tenders has increased to fifteen from five to phase the work so that it could be completed within the schedule, which has increased the risks within contracts that overlap each other. The report provides a detailed breakdown of this and other factors. That said the project is proceeding extremely well given the extraordinary challenge of constructing such a significant and complex project in two years, when it was originally planned to be constructed in five years.

Will this impact my 2011 property taxes?

No new tax-supported funds are required. The additional City funds required are within the previously approved waterfront budget.

Where will the additional funds come from?

The funds will come from the approved Waterfront budget for Phase 2, which has yet to receive Provincial and Federal approvals. This will leave $1.1 million in City funds in the Phase 2 budget. Once those approvals are in place, Administration will present Council with a strategy for implementation and funding (as was done for Phase 1), along with recommendations for approval.

Can the budget increase be offset by cutting back on the project?

Yes; but it would mean losing matching funding and significantly reducing the quality and aesthetics of the project.

Are other ISF projects experiencing cost increases?

Projects starting construction in summer 2010 have typically experienced greater costs than those that started in 2009. A few have had no cost increases, and some have had increases up to 30% higher than the design estimates. Some have experienced more challenges than others and, generally, the more complex the project, the more challenges. Most ISF projects are not nearly as complicated as the Prince Arthur’s Landing project as it includes 15 individual construction contracts (some overlapping), work in water and in winter, expanded servicing, site remediation, soil contamination, building on unconsolidated fill, five new buildings, one major building renovation, two major water features, eight major public art commissions, aboriginal consultation and working around the operation of the marina.

When will the Prince Arthur’s Landing project be finished and open to the public?

The City is working hard to complete the project by Oct. 31, 2011, which is the new deadline set by the Infrastructure Stimulus Fund. By late 2011 the park (excepting the areas immediately adjacent to the private development) will be open including the new ice skating rink and public buildings.

What is the status of construction?

Site servicing contracts are close to completion. The marina, fence and Pier 2 landscaping contracts are complete. The buildings will be complete in the spring and the balance of landscaping will be completed over the course of the summer and early fall.

What will be done to avoid any further cost increases?

Additional contingency funding has been built into the estimates for the final tenders based on the escalation experienced with the summer 2010 tenders. The consultants believe that this contingency will be sufficient to complete the project.

When will we know who the hotel partner is and when will the condominiums be built?

The hotel announcement is anticipated in late February or early March. The City Manager has requested a specific date from the Developer. Construction is planned to start first with the hotel this June. The condominiums will either be built after, or concurrently with the hotel.

How is City Council being kept informed?

Since 2009, 19 reports have been presented to Council’s Committee of the Whole, including six major progress and/or budget updates.

I appreciate the opportunity provided by NetNewsLedger to post this information that I hope helps address the many questions about the Waterfront Project.

Tim Commisso,

City Manager

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