Thursday, July 07, 2005

A Guaranteed Completion Date?

From the Iowa City Press-Citizen:
A $180 million, 4.5-acre enclosed rain forest project now has important benchmarks, including a guaranteed completion date, after a $5.5 million agreement with a development manager.

If The Environmental Project meets its fund-raising goals by Oct. 31, 2006, project vice-president Nancy Quellhorst said KUD International would guarantee a May 1, 2009, completion.

The Environmental Project approved a "memorandum of understanding" with KUD International, which has its headquarters in Japan. The agreement means KUD will oversee the construction of the project.

"I hope this will provide a level of confidence to the community at large," Quellhorst said.

KUD would coordinate all aspects of the construction phase of the project, expected to anchor the planned Iowa River Landing Development southeast of Interstate 80 and First Avenue. That would include coordinating architects, engineers and designers; producing the final schematic design and construction documents; overseeing the actual construction and possibly arranging financing.

John Best, project executive with KUD in Santa Monica, Calif., will oversee a group of about 12 people to coordinate the project.

As part of the agreement, KUD would guarantee on-budget and on-time delivery of the project.

Quellhorst said Environmental Project officials were working to complete raising the final $90 million needed by the Oct. 31, 2006, deadline.

"Which I would consider bold, but achievable," Quellhorst said.

KUD also would guarantee completion of the construction phase of the project for less than $160 million. The budget guarantee does not include $27 million in land from Coralville.

If the project goes beyond the projected completion date, KUD would pay $500,000 for each month the project runs late, Quellhorst said.

Best said the timeline was ambitious but doable.

"It's tight, every moment counts," Best said. "We'll all be working productively together."

Best has worked on other big-dollar KUD projects, such as the $118 million Long Beach Aquarium of the Pacific in Long Beach, Calif., and Pacific Bell Park, the home of the San Francisco Giants.

He said with KUD to guarantee the project's budget and timeline, it was likely donations and funding would come through.

The Environmental Project will pay KUD each month for pre-construction work, such as pulling together designers and engineers and preparing construction documents -- about $820,000 total. The total amount that would be paid to KUD through four years of construction would be $5.5 million.

Construction should begin between October 2006 and January 2007, according to the memorandum of understanding.

City Administrator Kelly Hayworth and City Councilor Tom Gill did not immediately return a phone call Wednesday seeking comment.

This is a good sign, but I still think it's unlikely that the project will come up with at least $90 million in private financing in 16 months.

Iowa taxpayers should consider getting a free sample of this.

Even if KUD can come up with the money, it'll be amazing to see how the project will be able to cover the daily operating expenses with an average of over 4000 people needed per day in order to just break even.