Cost of steel lifts tram's price tag
South Waterfront The aerial tram might now cost Portland $45 million, nearly triple the estimate from 2003
Saturday, October 22, 2005
FRED LEESON
Unexpected high bids for steel have raised the price tag of Portland's aerial tram by $5 million and launched another City Hall scramble to find extra money.
The steel bids, which came in at almost twice the estimates, could push the total cost to $45 million, or close to triple the estimated price from three years ago.
Portland City Commissioner Sam Adams, who manages city transportation matters, said project officials are trying to cut costs while preserving tram safety and the original design "within reason."
World demand for steel, driven in large part by fast growth in China, has pushed prices well above general inflation, said Vic Rhodes, project manager for Portland Aerial Tram Inc., a nonprofit company created by city government to build the tram.
Adams said he is talking with property owners, Oregon Health & Science University, the Oregon Department of Transportation and the Portland Development Commission about additional construction dollars. He said he would not seek more money from property owners in local improvement districts at both ends of the tram.
The 3,250-foot tram system would ferry passengers between the South Waterfront district and the Marquam Hill campus of Oregon Health & Science University.
Adams said he hopes to have a revised funding formula in place by Nov. 7. Time is urgent because 80 percent of the tram materials and labor have been committed, and construction is under way at all three tram locations -- two terminals and an intermediate tower.
The project completion date remains Sept. 30, 2006, but Rhodes said that is "an extremely tight schedule." He said a November opening might be more likely.
A $45 million budget would leave a contingency fund of approximately $3.7 million. Adams said the contingency is essential because the project is technically complex and more surprises could occur as work progresses.
Tram estimates started at $15.5 million during a design competition in 2003, then rose to $24 million, $28.5 million and $36.38 million. The last figure was part of a $40 million package approved by the City Council in April with a contingency fund.
Tied to OHSU plan
OHSU is constructing a 16-story building that will house medical offices, research facilities and a wellness center adjacent to the tram's eastern terminal in the South Waterfront district. It is on schedule to open next September.
The tram is a key element in OHSU's operations at the new building. "We are very concerned about getting both projects in on time," said Steve Stadum, OHSU's chief administrative officer. "But we realize there are always going to be scheduling issues."
The OHSU project is expected to be the first of several possible OHSU buildings on the Willamette riverfront. In addition, several high-rise condominium projects are under construction or in the planning stages in the South Waterfront urban renewal district near the tram's eastern terminal.
A funding formula approved by the City Council in April relied on property assessments on land at both ends of the project, tax increment urban renewal money from the South Waterfront, energy tax credits and a $4 million contribution from OHSU. The formula did not include any city general fund money.
Stadum said he doesn't expect the university to offer more than the $28.7 million it already has committed through property assessments and the cash donation. "I think they are satisfied with our contribution to date," he said of the city.
A new plan is likely to rely more heavily on urban renewal revenue from rising property taxes in the South Waterfront area. Urban renewal contributions amount to $3.5 million so far.
However, a larger contribution would mean less money available for streets, parks and other capital improvements normally funded by tax increment money in renewal districts.
Commitment to design
Rhodes said directors of the nonprofit tram company considered changing the design of the 185-foot intermediate tower that will lift tram cars over Southwest Macadam Avenue and Interstate 5. A lattice tower, looking like those that carry electric lines, was a cheaper alternative.
But Rhodes said the board wanted to keep its commitment to follow the design by Sarah Graham, a Los Angeles architect who won a design competition on the tram project in 2003.
Adams agreed with keeping the more expensive design.
Otherwise, "what you would be left with would be something that looked like a cheap ski lift at a bad ski resort," he said. Adams added that he didn't want to leave the city with an "ugly postcard" that could last 100 years.
Adams said the city also could face legal problems from property owners paying tax assessments for the tram if the project doesn't substantially comply with the plan adopted by the City Council.
However, Rhodes said engineers have found ways to achieve some savings on the intermediate tower by bolting instead of welding some steel plates, and by using different paint. Erection of the tower poses difficulties because of its unusual shape and angles. "There isn't a right angle in it," Rhodes said.
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