Bids $1 million lower than expected for school central office
SALISBURY — Architect and former City Councilman Bill Burgin said surprisingly low construction bids for the proposed school central office give the project a strong chance of winning state approval.
City and school officials were all smiles Thursday when bids came in $1 million lower than expected for the 62,000-square-foot office building planned for 329 S. Main St., which the city hopes to lease to the Rowan-Salisbury School System to house about 160 administrative employees.
Marand Builders of Charlotte had the low bid of $6.9 million for the building and $346,000 for the extras, for a total of $7.25 million. That’s less than the $8.5 million the city estimated the project would cost.
J.M. Thompson Co. of Cary offered the second-lowest bid, with a base bid of $6.91 million and total bid of $7.37 million.
Salisbury City Council plans to award the construction bid Sept. 3, if the project wins approval from the state’s Local Government Commission. Burgin said he expects the LGC to give the go-ahead.
“I can’t imagine that they have cause not to do this, I cannot imagine it,” Burgin said.
The LGC will consider two separate transactions related to the central office project — giving the city permission to borrow the money, and giving the school system permission to enter into a lease agreement with the city. If approved as designed to avoid needing Rowan County’s blessing, the city would carry the debt for 20 years, while the school board would have to vote to renew the lease every three years.
Burgin said Thursday’s bid was lower than the previous construction bid by about $10 per square foot.
This was the third bid opening for the controversial central office project. Today’s $6.9 million base bid and $7.25 million total bid was lower than the 2012 bid of $7.4 million for the same size building.
The school system also received a bid of $6.3 million in 2012 for a 48,000-square-foot, slimmed-down version of the building. Both of the previous bids expired.
Burgin opened 10 envelopes Thursday in City Hall. Afterward, he said he had hoped base bids would come in around $7.8 million.
But that ended up being the high bid from Salisbury firm KMD Construction, which is currently building the new Integro Technologies headquarters next door to the proposed central office site.
“They are excellent numbers,” Burgin said. “They are quite honestly better than I could have imagined.”
Burgin attributed the low figures to a tight construction market and a site that needed no demolition.
“It’s still a buyer’s market,” he said. “There are not a lot of projects and even fewer good, clean projects.”
The city demolished a former gas station on the site and cleaned up massive environmental contamination from underground oil storage tanks. That appealed to contractors, Burgin said.
“It’s a cleaner site,” he said. “There are not as many unknowns in terms of predicting labor and materials.”
The cleanup cost $496,665, mostly covered by the state. The city ended up paying $55,871.
The N.C. Department of Environment and Natural Resources has given the green light to develop the site, although two wells remain in place to monitor groundwater contamination and the department has yet to issue a “no further action” letter for the property.
Pumping is being used to reduce the concentrations of benzene and methyl tertiary-butylether that were found in the water beneath the site. The state’s project manager for the cleanup said development can proceed while pumping continues.
Now, Burgin said he and the city will complete due diligence on the low bid from Marand. The city is scheduled to submit an application Aug. 5 for financing to the state’s LGC, which will include the bid information.
If approved, the city expects to approve the construction bid Sept. 3.
“We got excellent bids,” Assistant City Manager John Sofley said. “… It’s always good to see a bid within the dollars you have allocated.”
The city had planned to ask to borrow $8.37 million on behalf of the school system, but the amount will be lower due to the construction bid, Sofley said. By state law, the school system can’t borrow money and would pay back the city over 20 years using state sales tax revenue earmarked for capital outlay, as long as the Board of Education continues to renew the lease.
The city should be able to include all three extra projects connected to the building, Sofley said, including:
• Furnish and install a decorative metal dome on top of the building. Marand bid $234,959.
• Furnish and install a custom desk for Rowan-Salisbury Board of Education. Marand bid $12,711.
• Provide data wiring and equipment. Marand bid $98,376.
“With the bid where it’s at, we anticipate doing all three alternatives,” Sofley said.
The alternatives could have been cut from the project if base bids had come in higher than expected, he said.
The Blanche and Julian Robertson Family Foundation has indicated it would fund the dome, Sofley said, which he had estimated would cost $125,000. Sofley said he will talk to foundation officials about the higher price tag to see what they’re willing to do.
The city took over the school central office project after Rowan County commissioners withdrew their support for the downtown location, citing the environmental contamination. City and school officials came up with a 35-month lease agreement to avoid giving commissioners the chance to vote down the project again.
The office building project is considered key to the city’s effort to revitalize South Main Street and lure a developer to buy the vacant Empire Hotel. At least two City Council members have said publicly that they want the project to move forward even if the school system’s plan to lease the building is derailed.
“I think it will happen. I’m excited for the city and what I think it can do for the county, by way of what it does for the city,” Burgin said. “What the city gets, the county gets.”
Contact reporter Emily Ford at 704-797-4264.