The Mobile City Council approved Wednesday what one council member called a “travesty” in moving more than $9.5 million in city reserves to finance an unexpected cost increase for a new five-story, 1000-space parking garage near the Mobile Civic Center.

The council also approved a $38.2 million contract with Mobile-based White-Spunner for the construction contract of the parking garage that is set to be completed by January 2025, and in unison with the U.S. Army Corps of Engineers office building already under construction. Both projects are occurring within the 22-acre Civic Cetner property.

While both approvals were unanimous, some council members were hoping to find additional cost savings and are raising concerns about what could loom as officials move closer to a design for a complete refurbishment to the 59-year-old Civic Center building.

“Very concerned,” Council President C.J. Small said after the meeting.

Council members said the 31% cost overrun on the parking garage could have better served other areas of the city where expensive infrastructure improvements are needed.

“You think about it being over $9.5 million (than initially estimated) and that is a project we are pulling from our surplus,” said Councilman Cory Penn. “It would be great to utilize this type of funding throughout the city for other issues.”

Searching for savings

The council’s decision occurred after there was some consideration for finding some cost savings, albeit a small percentage of the overall project. The council, last week, tapped its project manager, Volkert Inc., to provide a list of areas where the parking garage project could include savings.

Volkert’s analysis comes after they were hired in August to oversee the project management of the entire Civic Center property. They were not involved in the original estimates on the parking garage.

“We’ve identified ways for value engineering to take costs out,” said George Talbot, vice-president of external affairs with Volkert. “We’ve identified ways to do that. The council approved the full value (for the parking garage) but we’ll continue to look for savings.”

Councilman Ben Reynolds pushed unsuccessfully for a $432,400 reduction by supporting a few construction-related tweaks that including installing PVC piping underground, adjusting the sprinkler system, and reducing 3 inches of thickness from precast panels that will cover the parking garage.

Reynolds could not get any other council member to back his proposal.

“Our consultants have done a great job here in identifying the opportunities,” Reynolds said. “That’s the unfortunate part of this. We are not taking advantage to save $432,000.”

Other council members found the cost savings to be miniscule in the grand scheme of the entire parking garage project. They also said that much larger areas for cost savings – such as removing elevators or even an entire level of the parking garage – would be more problematic long-term.

“What we don’t want to happen through cost cutting is end up handing a city council 10 to 15 years from now a multi-million dollar problem to fix,” Councilman Joel Daves said.

Small said he was concerned with the Gulf Coast environment damaging a parking garage that included a reduction in materials.

“We are close enough to hurricanes and (wanted to ensure) the quality is there,” he said. “We don’t want to move things around and not have the quality. If we don’t pay for it today, we might have to pay for it five to 10 to 15 years down the road. A hurricane or other elements might compromise or destroy the building.”

Future benefits

Other council members said the upfront costs on the parking garage now will repay itself years later when the Civic Center project is completed. A design proposal for a complete Civic Center overhaul that includes cost estimates could be available before the end of next month, Talbot said.

Rough estimates put the Civic Center project at more than $200 million.

“We are aware we haven’t gotten a final price estimate on the Civic Center yet, but we are also talking about additional economic development in that campus,” said Councilman William Carroll, who described the unexpected parking garage costs as a travesty. “In time, the value of construction and what we spend will be less than what our economic return is (on the new facility).”

The rising parking garage costs, first unveiled to the council last week, were attributed to rising inflation on construction materials, particularly concrete.

Councilwoman Gina Gregory said that while the council “had sticker shock” on the soaring construction costs, though it was an understandable hit when “everything has gone up.”

“Unfortunately, this has happened,” she said. “The (original) estimates were old. We were told it will not happen again. The future use of this site will be important for all of us with economic development, whether it’s sports or entertainment or retail. It will be for the benefit of everyone in the city.”

She added, “The eventual economic development return will far exceed what we pay on this parking garage.”