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Price not right for Rehoboth City Hall project

Cape Gazette of Lewes, Delaware

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Lowest bid is $2 million over budget; major demolition of building to start Friday, Jan. 8

Bids on Rehoboth Beach's new City Hall came in so high it could put the project $2 million over budget, sending officials scrambling to find ways to reduce costs.

Mayor Sam Cooper said the low bidder on the project was Whiting-Turner Construction, a nationwide firm with offices in Salisbury; the firm submitted an $11.5 million bid.

At a Jan. 4 special meeting at Rehoboth fire hall, Cooper said contrary to expectations of primary contractor EDiS Co., which predicted four bids, only two companies bid on the project. Cooper said the two bidders were large firms capable of doing the work, but large firms also have higher overhead costs.

The project was estimated to cost $18 million, but Cooper said demolition and other aspects of the project have chipped away at the city's financing.

"We find ourselves in the unenviable position of not having enough money borrowed to do the project as outlined," Cooper said.

He said EDiS is talking with Whiting-Turner to lower the bid; several items will be add-alternates to reduce costs.

Cooper said if the contractor does not reduce the bid, the city would require another $1.5 million to $2 million to complete the project. Cooper provided no specifics on how that would be done.

City Manager Sharon Lynn said the city would not have to go back to referendum to borrow more money. She said the city can borrow up to $6 million without a referendum. She said funding could be also built into the next two years' budgets. Cooper said additional money could also be gleaned from $500,000 in contingency funds built into the project.

The new City Hall was approved by voters June 27 by a 701-544 vote, giving the city authority to borrow $18 million. Plans call for a two-story building with an additional area to be used for police training and future space. The city plans to borrow $18 million from PNC Bank to pay for construction. Once the project is complete, the city can then use a loan from U.S. Department of Agriculture to pay back the bank. The city would then repay USDA over a 20-year span.

The commissioners agreed to schedule a special meeting at 9 a.m., Monday, Jan. 11, to revisit the issue and decide how to move forward. While construction on the new City Hall is temporarily on hold, the city is moving forward with demolition on the old City Hall. Interior demolition has already begun; Lynn said major demolition would start Friday, Jan. 8. The former City Hall had been in service since 1966.

Lynn said city staff has been relocated to trailers behind the Rehoboth fire hall. City offices may be accessed from Rehoboth Avenue. Among Whiting-Turner's other projects are a renovation of the Baltimore Museum of Art, The College of William and Mary's Mason School of Business and the Horseshoe Casino in Baltimore.



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Original Publication Date: January 5, 2016



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