A contract with RJM Construction as the construction manager at risk for the ice arena project was approved this week by the Watertown City Council.
In August, the council deemed it was in the public’s interest to solicit a construction manager at risk. The contract took several months to be drafted and presented to the council due to the ironing out details – particularly those relating to financial transparency.
With the increased cost of construction materials and long procurement times for the items, the council wanted a full understanding of the scope of tasks RJM Construction will complete.
Dick Strassburg and his colleague Mike Van Klei from Tegra Group were present via Zoom to address the council’s questions.
“It’s a difficult time within the construction industry in terms of taking on risk with cost escalations the way they are at the market,” said Strassburg.
Buying steel, prefab concrete panels, roofing and insulation early in the construction process has become necessary in these times of shortages and inflation. For example, steel orders were eight weeks out but now take an entire year to receive, Strassburg said.
“Some of the world events that are happening right now may create other challenges,” he said.
Contracting with a construction manager at risk provides an alternative to the hard bid situation that would traditionally occur on large construction projects. Van Klei explained to the council why a bidding situation is not in its best interest.
“It would create more of an adversarial role between owners, architects and contractors because there is quite a lot of emphasis put on what is shown on the drawings. With the construction manager at risk procurement process, you bring a partner on early, and you bring them on through qualifications, not just price,” he said.
RJM Construction will help maintain the budget as the final drawings are defined and construction documents made ready. RJM is also responsible for receiving bids from the subcontractors and will recommend to the city which company is awarded the contract.
The Watertown City Council has approved the issuance of $20 million in sales tax revenue bonds for the new arena.
The arena will be located on First Avenue and 31st Street Northeast in the Willow Creek development. The 94,000-square-foot complex will sport two NHL-sized ice rinks with the building design fitted for a potential expansion to house a third sheet of ice in the future.
Counteroffer received on livestock barn property
The city council approved an addendum for the purchase agreement of the South Dakota Livestock Sales property by removing the contingency for an environmental inspection.
The council was informed that the property the city hopes to build the new streets department headquarters on has had a counteroffer from a potential buyer without any contingencies.
During the Feb. 22 meeting, the council approved the purchase agreement for the acreage for $1.2 million with a contingency of an environmental inspection.
City Attorney Matt Roby said that the city’s engineering department has already examined the property and has not found any issues of concern. He also said that the animal waste “lagoon” was cleaned up back in 2015 in accordance with state requirements.
The city is slated to close on the purchase by March 25.