Mobile city officials are in a race against time that begins Tuesday with two crucial votes to finance and build a new Civic Center arena.

But while the race at Government Plaza is focused on getting the arena completed before the 2027 Carnival season, there is another race as well that might be harder to outrun: President Donald Trump’s tariffs.

The uncertainty of future construction costs looms over the council’s vote on a $237.4 million contract with Birmingham-based B.L. Harbert International, the low-bidder on the arena project. The council will also vote separately on a 20-year, $250 million financing project.

The total project cost is $300 million. The overall costs include demolition of the former Civic Center, construction of an adjacent parking deck, reinstallation of two murals, a sprinkler system, and more.

Tariff unknowns

Last week, city officials and Billy Harbert, chairman and CEO of the arena’s contractor, acknowledged that tariffs on imported steel and other materials pose an unknown factor for the project’s construction.

“We don’t know the answer to that one,” Harbert said last week while speaking to the local media. “I don’t think anyone on the planet knows where we are headed with tariffs. I’m not a big believer of tariffs, but it’s something we have to deal with.”

Mobile Mayor Sandy Stimpson stated that, if implemented, tariffs would be the responsibility of B.L. Harbert, but he also acknowledged uncertainty about the potential impact.

“If tariffs go into place, eventually the costs to consumers on everything from aluminum to steel, is more expensive,” said Dan Sutter, professor of economics at Troy University.

The issue is a wild card facing the construction industry. Trump has made tariffs against some of the U.S.’s trading partners a hallmark policy during the initial weeks of his presidency. He enacted 10 percent tariff on all Chinese goods earlier this month and is threatening much higher assessments in the months to come.

The president’s aggressive trade policy includes utilizing tariffs to extract concessions from Mexico and Canada on border crossings and fentanyl enforcement. In early February, he threatened 25 percent tariffs on imports from Mexico and Canada but later withdrew the threat. A study on tariffs is due in April.

Trump, again on Monday, reiterated his support for tariffs on Canada and Mexico.

The president has already announced a 25 percent tariff on steel and aluminum from all countries, effective March 12, with no exceptions.

Sutter said that when a similar tariff was imposed during Trump’s first term in 2018, it significantly impacted construction projects, with many exceeding their budgets by over 10 percent.

“Steel is often a big part of the costs,” he said. “We know that the tariffs, if they go in effect with no exceptions, it has a big impact on construction companies and a 10 percent overrun in costs will be pretty significant. There may be an issue with a contract, and some ability to adjust that.”

Price shocks

Councilman Ben Reynolds said he believes there is enough built-in contingency within the project to withstand a price shock, if it occurs.

The city is being advised by Volkert Inc. on the arena project, and Reynolds said he’s been assured by their representatives that enough money is set aside to withstand “unforeseen” change orders.

Councilman William Carroll, a construction industry veteran of over 25 years, explained that the potential impact of a tariff would depend on the country imposing it and the specific materials being assessed.

“If you put a tariff on a country that (exports) a lot of metals for steel and metal studs, it would run the prices up and lead to cost changes,” said Carroll. “I would hope the purchase orders go out soon enough and quick enough, that the industry can hold the suppliers to the prices that are quoted.”

Sutter said that even by locking in a price now, it doesn’t shield a project from future price fluctuations. He said a tariff should be viewed as a tax that would add onto construction supplies imported into Alabama.

“You lock in the price with a steel supplier, but a tax would be added on top of that,” Sutter said. “In the (construction) industry, they suggest trying to diversify the sources of steel and aluminum to the extent that you can and maybe try and find somewhere (else) where they are coming from (that is not being assessed a tariff) or domestically.”

Aggressive timeline

Carroll, Reynolds, and other city officials have stated that tariff uncertainties, or any other unanswered questions about the project, will not impede the council’s vote on the two contracts scheduled for Tuesday.

The arena’s construction timeline is aggressive. The city wants the entire venue built before the start of the Carnival season in 2027. The former Civic Center Arena was the longtime host for Mardi Gras balls, but the Carnival season this year and next year will not have an arena to host many of them.

The approximately 10,000-seat new arena, once constructed, is expected to host sporting events and concerts. It will also be a future epicenter for Mobile Mardi Gras balls. The venue’s future managers, The OVG Group, is eying the venue as the future home for professional minor league ice hockey.

The 60-year-old former arena has been completely demolished.

The Mobile County Commission, meanwhile, has yet to approve an appropriation to support the arena project. Commissioners had been considering a $10 million allocation, but no vote took place during their meeting on Monday.

“If we can come to a consensus on a number, then at a meeting in March, we’ll approve it,” said Commissioner Randall Dueitt, a supporter of the arena project.