Council Advises Port to Seek New Bids on Convention Center
Expressing reluctance to move “full speed ahead” with San Diego’s waterfront convention center until questions over a projected $20-million cost increase and other matters are resolved, the San Diego City Council on Monday unanimously recommended that the controversial project be rebid.
By an 8-0 vote, the council encouraged the San Diego Unified Port District to reject six budget-busting construction bids received last month and solicit a second round of bids--a process that could delay the project by as much as six months and cost more than $30 million in lost convention business.
Should new bids be requested, the council also proposed that minority firms receive a substantially larger share of the project’s subcontract work than the 2% figure included in last month’s bids.
“In the long run, I think we’ll look back and be thankful we did this,” said acting Mayor Ed Struiksma, who called for the project to be rebid earlier this month. “There are no guarantees. But it is my personal belief that we can save money by rebidding the project.”
While only advisory in nature, the council’s vote Monday could have a significant impact on the port’s ultimate decision whether to proceed with or rebid the project. Three of the port’s seven commissioners represent the City of San Diego, and presumably those members will be heavily influenced by the council’s decision.
“It’s only advice, but it’s advice from the people who appointed us,” Port Commissioner Louis Wolfsheimer said after the council’s 2 1/2-hour debate. “I’m surprised it was unanimous. That’s pretty strong. I’m certainly going to listen hard.”
Similarly, Port Commissioner William Rick characterized the council’s vote as “advice given with some authority . . . that carries some weight.”
The council’s recommendation also added another twist to the roller-coaster path that the convention center project has followed since construction bids came in last month more than 20% over the port’s $101.5-million budget.
Two weeks ago, a special task force appointed by Struiksma received diametrically opposed recommendations from two of its subcommittees--one urging that the project proceed expeditiously despite the higher-than-expected costs, while the other group favored rebidding in an attempt to trim construction expenses.
By last week, however, the task force had coalesced behind the recommendation that the center be built immediately, rejecting Struiksma’s call for a rebid.
But if Struiksma lost the battle last week, he won one Monday when his colleagues ignored the task force’s advice and sided with him. The final decision on whether to accept or reject last month’s bids must be made before May 18 by the port, which will finance construction of the 1.4-million-square-foot facility on Navy Field, adjacent to Seaport Village and the Hotel Inter-Continental.
The council’s action Monday also represented a serious setback for a coalition of downtown business owners, residents and local tourism executives that has lobbied vigorously for the immediate construction of the center. They argue that any savings that might be achieved through rebidding would be outweighed by the loss of even more money in convention business. Further delays, those individuals warned, also could damage downtown businesses, particularly small firms, whose economic survival is widely considered to be directly related to the convention center.
However, throughout Monday’s debate, council members repeatedly argued that their credibility, if not their money, is at stake in the port’s decision. In support of that contention, several council members recalled that during the November, 1983, campaign in which San Diegans approved the convention center in an advisory vote, proponents billed the project as a $95-million plan--about $65 million less than what port officials now estimate the final price tag will be.
Conceding that potential construction delays stemming from a rebid might cause “some losses that are significant” in convention business, Councilman William Jones argued that “public confidence . . . is a larger issue here.”
“We need to be very cautious not to really push the voters past a limit,” Jones said, noting the disparity between the original $95-million estimate and the $160-million figure cited recently. “I believe that our word (is at stake). For us to go forward without taking every single precaution to make sure that this is the best that we can do (when) we’re using public dollars, I believe that’s a mistake.”
Jones and other council members also complained that the existing six bids fall far short of the city’s guidelines for the hiring of minority and female subcontractors on major projects. While city policy sets subcontract targets of 15% for minority firms and 5% for female-owned companies, the bids indicated that only about 2% of the construction work would go to minority subcontractors, Struiksma emphasized.
“The council and the Port District expect for the contractors and the subcontractors to make more than just a good faith effort” to meet affirmative-action and equal employment opportunity goals, City Manager Sylvester Murray told the council.
“I don’t think that we can give them numbers,” Murray added. “But I think that if we . . . say very specifically to all of the contractors that you are going to be evaluated as much because of the affirmative action . . . efforts as you are with the money, that they will produce.”
Another major argument offered by council members and other city officials was that a second round of bidding not only could cut costs but also might eliminate potential construction problems stemming from what Struiksma called the “rushed atmosphere” surrounding the bids received in March.
Because of numerous design changes that occurred during the final stages of last month’s bidding process--bids were solicited when the project’s specifications were about 60% complete--some officials have speculated that the firms that bid may have inflated their figures as a safeguard against unexpected expenses or unanticipated construction problems.
“The attempt, I believe, to move forward as rapidly as we could to obtain bids is the thing that got us into the position we are today,” said Deputy City Manager John Fowler. “We’re paying the penalty of trying to accelerate the whole project last fall.”
Saying that the same mistake should not be repeated, Councilwoman Judy McCarty added: “We’re in a situation . . . going full speed ahead, and when that happens, you make mistakes. Sometimes when you do that, you think, ‘I’ll go back and fix it next time.’ There’s no next time with our convention center.”
Council members also noted that rebidding could eliminate a lawsuit filed by three local lawyers charging that last month’s bids are invalid because the specifications submitted to bidders violated state competitive bidding guidelines.
Reiterating details examined by the special mayoral task force, local tourism industry officials stressed Monday that any postponement of the convention center’s target opening date in the fall of 1988 could force the cancellation of already-booked conventions, causing the city to lose millions of dollars in hotel taxes and conventioneers’ spending.
Allan Frostrom, chairman of the San Diego Convention & Visitors Bureau, noted that a two-month delay could cost more than $30 million in lost convention business, while the loss attributable to an eight-month delay would be more than double that figure and could go as high as $109 million.
“Somebody’s head has got to roll on this point,” Councilman Uvaldo Martinez said angrily, citing those projected losses. “This project has been mismanaged and I don’t think that we ought to tolerate it. This delay could damage the economy of this community irreparably.”
Downtown business owners and residents also expressed concerns that delaying the project would damage downtown’s overall economic viability and social ambiance.
“Delay at this point also shows a lack of commitment to those of us downtown who have staked our money on this going forward,” said Bill Sauls, a spokesman for residents of the Marina Park and Park Row condominium projects.
Rick told the council that rebidding probably would cause about a six-month delay but that the “practical delay” might be only about half that long, or shorter. Excavation of the site, slowed by serious water drainage problems, is not expected to be completed until June or July, meaning that even if one of the current bids were accepted, construction could not begin for several months.
In a related matter, HuntCor Inc., the Phoenix-based firm doing the excavation work, told port officials during a private meeting Monday that because of increased pumping on the 11-acre site, digging can proceed, Rick said.
Earlier this month, HuntCor officials sent the port a letter asking that their excavation contract be canceled and warning that the center’s foundation could be damaged if plans calling for two levels of underground parking are followed. Port officials rejected HuntCor’s request, viewing it as a ploy aimed at obtaining more payment for the work.
During Monday’s meeting, HuntCor officials said that the excavation could be completed in 6 to 10 weeks, according to port engineer John Wilbur.
“If HuntCor does everything they promised . . . all will be well,” Rick said.