Fort Collins DDA faces 30 percent cost increase for Old Town Square

FORT COLLINS – The Fort Collins Downtown Development Authority is scrambling to find ways to keep renovation of the city’s aging Old Town Square on track while covering what one board member called a stunning 30 percent rise in the project’s price tag.

What had been a $3 million cost estimate just a month ago – as the DDA planned a Feb. 11 groundbreaking for the project – had suddenly jumped by $900,000 by the time the Fort Collins City Council heard a report by City Councilman Bob Overbeck, the city’s representative on the 11-member DDA board.

“I was stunned, but not surprised,” Overbeck said Friday in a telephone interview with BizWest. “It’s understandable, when you look at the massive development going on in Fort Collins – there are cranes everywhere – that the demand for labor and materials would raise costs. Also, the oil boom has taken away a lot of labor typically used for construction.

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“The price of oil has been falling, though, and the layoffs in that sector might help,” Overbeck added, “but it probably wouldn’t happen quick enough.”

The DDA, which owns the plaza that is lined with shops, restaurants and bars, announced just two days before the groundbreaking that the ceremony had been postponed indefinitely. Although Overbeck wouldn’t directly link the postponement to the discovery of the higher costs, he did say “it may have been bad form” to hold the ceremony the day before a DDA meeting to discuss how to cover the shortfall.

The first phase of the renovation, still scheduled to begin in March, is to include moving the stage to the northwest corner of the square, with the intent of having it ready for NewWestFest in August. The project is intended to open up the square, update infrastructure and add some amenities to the 30-year-old downtown hub, which has suffered from the inevitable wear and tear of a full schedule of large community gatherings.

Overbeck said the cost overrun could be covered without cutting out amenities the DDA promised and that stakeholders asked to be added, partially by diverting funds from other projects and partially by looking for some less expensive materials and methods of installation to be used in the construction.

“They think they can get $3.6 million that way,” Overbeck said. “There’s two pools of money that can be tapped,” he said, including funds that had been designated for improvements in the River District as well as interest earned on some investments.

In addition, Overbeck said, the DDA board opted to tap a $130,000 grant it is seeking from Great Outdoors Colorado, which uses revenue from the sale of state lottery tickets. Those funds would arrive in June if the city’s application is accepted.

Overbeck was the board’s lone voice in opposition to using the “GOCO” funds, however.

“I would like the staff to work harder,” he said. “I understand that some of that could be diverted from flood recovery, open space, trails and parks, but I don’t support that for fountains, tables and chairs.”

The original $3 million for the project is coming from $1.9 million in tax-increment financing committed to by the DDA, $1 million from the city through its Downtown General Improvement District and much of the rest from Progressive Old Town Square, which owns the buildings around the plaza.

Calls to DDA executive director Matt Robenalt and Larimer County Commissioner Steve Johnson, the county’s representative on the DDA board, were not immediately returned.

Dealing with potential cost overruns will be top of mind in coming weeks for Overbeck, not only in his DDA board position regarding Old Town Square but also in his City Council role. The council will be dealing with how to meet the rising costs of improvements to the Lincoln Avenue corridor and other street projects, as well as considering a draft intergovernmental agreement with Colorado State University on the division of off-campus infrastructure costs related to the $242 million on-campus football stadium approved by the school’s Board of Governors.

The council on Dec. 2 had approved an infrastructure impact study that estimated the city’s stadium-related costs at $24.3 million — as a starting point. Staff from the city and CSU will present a proposed cost-sharing agreement at a planning and zoning board work session March 6, and then the pact will be considered by Overbeck and his council colleagues on March 17.

Cost overruns are all too common in major public-works projects. In December, the University of Colorado revealed that the cost of renovations and new construction that already has begun in and near Folsom Field in Boulder could be $77.5 million more than the often publicized $156 million price tag, and the city of Denver is dealing with 5 percent to 10 percent increases in the cost of its multi-tiered airport construction project.

In light of the 30 percent rise in Old Town renovation costs, Overbeck wondered Friday what that stadium-related figure would be now and in the future. “I don’t think we have the complete picture,” he said.

Councilman Wade Troxell had told BizWest in December that he saw little appetite within the city to accommodate costs related to the stadium.

On Friday, Overbeck responded, “Appetite? I think it’s more like indigestion.”