Project leads to ‘sticker shock’

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Convention center size scaled down after bids come back too high

The Denton City Council got its first look Tuesday afternoon at the proposed convention center, after construction bids came back from contractors about 40 percent higher than expected.

Assistant City Manager Jon Fortune told the City Council during a work session that the city was hoping bids would come in about $18 million, which would have provided for a two-story, 100,000-square-foot facility. The rest of the anticipated $25 million would cover furnishings, equipment and other expenses that are not part of the actual construction of the building.

Instead, bids came in at a range of $24.5 million to $31.2 million, city documents showed.

To meet the original budget, the staff and the developer, O’Reilly Hospitality Management and O’Reilly Hospitality Partners Denton, brought new drawings of the convention center. The new design cuts the building to a single floor with a little less than 75,000 square feet. But the center could still accommodate a multi-day convention of 750 people or a single event of 2,000, according to the developer.

Fortune told the council that the city selected the lowest bidder, Clark Contractors, of Little Rock, Arkansas, to continue its discussions looking for ways to bring the project closer to budget.

City leaders have been planning for several years to bring a convention center and accompanying hotel to University of North Texas land next to Apogee Stadium. The city has planned to fund the project with certificates of obligation.

As a courtesy, Mayor Chris Watts asked council members whether they would consider calling an election for the center’s financing, citing the need to be prudent. Residents have shown a lot of interest in the project, he said, adding that it was possible they could bring a petition to force the vote on the financing anyway.

But, for a wide variety of reasons, the mayor didn’t have any takers to put the matter on next week’s agenda.

Council members John Ryan and Greg Johnson said that the project wasn’t ready to be voted on by the council, let alone the voters. Johnson added that while he understands the need to get the project to fit the city’s budget, he wasn’t comfortable voting on the project as it stands now.

“We have a lot of new information,” Johnson said. “We’ve got budget issues. We’ve got capacity issues.”

Council members Joey Hawkins and Jim Engelbrecht said the city signaled its willingness to work on the public-private partnership long ago. Denton signed a master agreement with UNT and O’Reilly to work together on the project. Like council member Kevin Roden, who was out of town but published his views on his blog, they wondered whether the time for the matter to go to the voters had passed and if it was time for the council to lead the project in whatever direction it might go.

But, Engelbrecht added, “if it gets much smaller, then we’re out.”

Council member Dalton Gregory said he was concerned that calling an election, and possibly seeing it fail, could create a new condition that isn’t in the master agreement, which already has termination points.

The developer has asked for a tax abatement from both the county and the Denton school district. If those don’t come through — and they haven’t so far — the developer could opt out.

The Denton school board met Monday to set the agendas for its next four meetings: Aug. 12, Aug. 26, Sept. 9 and Sept. 23. Excluded from the future agendas was any discussion of the hotel and conference center project.

“It’s not on the agenda for the immediate future,” board President Glenna Harris said. “Currently there is no reason for us to revisit the issue at this time.”

She said she’s aware of Denton residents who have started a petition to get the the sale of bonds to finance the proposed convention center on a future ballot. Yet, “that has nothing to do” with the school board, she said.

“When or if it goes before the voters, we may or may not revisit it,” Harris said.

The city can also walk away from the agreement if the convention center cannot be built at the size and budget the city planned. Council members agreed the project needs more work.

“Everybody has sticker shock,” Johnson said. “We have a lot of work to do.”

Staff writer Britney Tabor contributed to this report.

PEGGY HEINKEL-WOLFE can be reached at 940-566-6881 and via Twitter at @phwolfeDRC.

IN OTHER ACTION

During its regular meeting Tuesday, the Denton City Council also:

• Ordered a Nov. 4 election to legalize the sale of all alcoholic beverages, including mixed beverages, in the city.

• Authorized an agreement with Krum to exchange fire trucks of equivalent value in order to acquire a vehicle valuable to the Denton Firefighters Museum.

• Authorized a $36,000 offer to purchase about 1 acre and secure an easement on another 2 acres for a detention facility on south Fort Worth Drive.

• Approved the purchase of a utility crane truck from Chastang Ford for $110,221; three pickups for the fire department and traffic control from Dallas Dodge for $208,706; radio equipment from Johnston Technical Services for $150,000; connectivity services from the state Department of Information Resources for $18,000; pre-cast concrete security screening fencing for two substations and the animal shelter from Walsh’s Hawk Construction for $868,607; ground surveying for the landfill from Coleman and Associates for $350,000; and lighting for the Mack Park soccer fields from Musco Sports Lighting for $147,131.

• For Denton Municipal Electric, awarded a $684,675 contract to Techline for concrete light poles, and two 3-year contracts, one for $1 million for distribution conductors from HD Power Solutions and one for transmission hardware from Stuart Irby for $620,000.


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