Sunday, May 06, 2001
Ballpark costs on fast track
3 firms have already spent $3.3M out of pocket
By Dan Klepal
The Cincinnati Enquirer
They're called “soft” costs, but they add up to hard cash.
Seven months into the construction of Great American Ball Park, the three companies building the facility have rung up $3.3 million in out-of-pocket expenses — everything from airline tickets and hotel rooms to telephones and copy machines.
The cash to pay for these expenses comes out of county tax coffers and is a normal part of doing business.
Mike Sieving, the county's construction executive, said a lot of planning went into expense budgets, and a lot of oversight goes into payments.
“The dollars become significant,” Mr. Sieving said. “At this point we're controlling it pretty well.”
On Paul Brown Stadium, the construction and project managers alone spent $8.4 million in incidental expenses.
With two years of work left on the baseball stadium, it appears all three project team companies will go over initial expense estimates:
• Parsons Brinckerhoff, the construction manager, was budgeted for $200,000 but is going over that amount to $450,000, mainly due to printing and public relations costs.
• Hunt Construction, which is building the stadium, has spent $1.8 million of its $3 million budget.
• HOK Sport, the architect, has spent $1.5 million of its budgeted $2.5 million.
Expenses make up a small portion of the overall budget, but they can add up quickly, Mr. Sieving said. Some contracts allow companies to mark up reimbursables.
The county is paying more than $1,000 per month on an apartment for construction manager Eric Schreiner. Mr. Sieving said the construction manager is in town three or four nights a week, so the apartment is cheaper than a hotel room.
“If they didn't expense this, their rate would be higher,” Mr. Sieving said. “We pay on this stuff one way or the other.”
Among the expenses has been a $900 charge to ship two chairs to GBBN Architects in Cincinnati. The firm tests potential ballpark office furniture.
“That was a chair that couldn't get there any other way,” Mr. Sieving said. “They've been evaluating chairs, and GBBN is where they go.”
An analysis of expenses submitted to Hamilton County thus far shows officials are keeping a rein on costs two ways:
• Contracts limit dinner expenses to $20, lunch and breakfast to $10 and hotel rooms to $100 per day. The contracts also require coach airline travel and no reimbursement on alcohol purchases during meals.
• Detailed record-keeping to ensure proper amounts are paid.
Project manager Arnie Rosenberg said the county's program follows other projects he's been involved with that were based on federal guidelines.
“The contracts were written very prudently to make reimbursables at cost and with certain limits, rather than allowing a mark-up,” Mr. Rosenberg said.
Andrew Zimbalist, an economics professor at Smith College in Massachusetts, has written numerous books on stadium construction and served as a consultant to cities and counties building stadiums.
Mr. Zimbalist said there are many ways to handle reimbursable expenses. He said those expenses — even if they add up to $6 million on a $330 million project — need to be controlled carefully.
“When you're playing with house money, you've got to be careful because the public expects vigilance,” Mr. Zimbalist said. “The controls in Hamilton County are a good effort.
“It doesn't show you the entirety of the effort to control costs on the project, but the fact that they're doing these things is better than not doing them.”
The ballpark is an estimated $20 million over budget, an amount that will either be covered by the Reds or trimmed by removing luxuries. The overages have been largely due to steel and concrete contracts that have come in over estimate, officials have said.
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Ballpark costs on fast track
