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City share of OSF project rises 40 percent Ashland portion of parking structure now $845,000; lease becomes issue By TONY BOOM ASHLAND � A $245,000 increase in the estimated shared cost of a three-level, Hargadine Street parking structure has city officials rethinking its lease with the Oregon Shakespeare Festival. OSF has notified the city that the city�s portion of the project cost is $845,000, a 40 percent increase over the original estimate of $600,000. The entire project is now expected to cost $2.37 million rather than the anticipated $1.8 million. Ashland agreed to a 75-year lease of the land on which OSF is building the 145-space parking facility and a 350-seat theater to replace the Black Swan. The site previously provided 84 parking spaces. Under the lease, the city was to pay for part of the facility. The city will own the structure. "We were dealing with very preliminary drawings and very preliminary estimates at the time the lease was signed," said Paul Nicholson, OSF executive director. "We thought it would be about $1.8 million and the city�s part would be one third. They were very, very rough estimates." Nicholson says the contract provides for the city to pay for the intermediate level of the structure and the strengthening for future development adjacent to Hargadine above the third level. "There are no numbers in the lease and there was never any discussion about what the city�s cost was likely to be in any City Council meeting," said Nicholson. Figures were requested after the lease was signed, he added. City Budget Committee member Russ Silbiger also said the City Council didn�t explore the costs involved in the lease. "They just did it. Nobody bothered to ask what it would cost," said Silbiger. "Obviously, there�s nothing in the agreement that allowed for us to be informed before the fact of any cost increase." Nicholson said costs have been driven up by the need to build a stronger structure than anticipated, which also has forced the contractor to dig deeper. Because it is a city-owned project, the builder must pay prevailing wage rates. This typically adds 20 to 25 percent to the cost of a project, said Nicholson. "We were willing to build the whole thing and cover the cost of the city�s share by introducing paid parking, but the city chose to try to keep this to themselves," said Nicholson. OSF has given the city a new proposal, according to City Administrator Greg Scoles. It calls for the festival to build, operate and maintain the structure and to be able to charge a user fee. Revenues from fees would cover the city�s construction share, operations, a maintenance reserve and management fees. If the city retains ownership, it would consider charging parking fees to pay its debt to OSF, said Scoles. City Councilman David Fine says OSF�s proposal is on a "take it or leave it" basis. "It�s time (for the city) to stop acting as a junior partner," said Fine. He would like to see the lease renegotiated. "The city entered into the project ... on the basis of festival representations," said Fine. "Given that the city went into it purely for the benefit of the festival, we ought to ensure the interest of citizens and taxpayers that (cost) overruns remain the responsibility of the festival." Distribution of a $600,000 grant from the Oregon Economic and Community Development Department must also be determined. The city applied for the grant, but it was written and prepared by OSF. In addition to the grant, the department also awarded a $900,000 loan. Because the loan can�t be made to a private organization, the awards were given to the city. Mayor Alan DeBoer said he feels a portion of the grant should go to the city since it is paying for part of the project. The city must agree to terms of the grant with the OECDD before it formally accepts the grant. A draft agreement by the department will need some revisions, said Scoles. "We�ve been focusing on the costs themselves because the contract wasn�t specific," said Scoles. OSF contractor Emerick Construction, Portland, has met with city engineers to review how costs of the project are apportioned. The City Council will examine the issues at its meeting March 20 at the Ashland Civic Center. Ground breaking for the project was held Nov. 17. The festival hopes to have two levels of the parking structure available for use by the end of June. Reach Ashland bureau reporter Tony Boom at 482-4651, or e-mail [email protected] Mail Tribune Home | Ottaway Newspapers, Inc. | Dow Jones & Co., Inc. | Privacy | Contact Us Copyright � 2001 Mail Tribune, Inc.