S. Waterfront greenway runs way over cost
Projections - Construction inflation through 2020 is cited as the park's price estimate rises 76 percent to $56 million
Saturday, November 24, 2007
RYAN FRANK
The Oregonian Staff
The expected price tag to build a 1.2-mile riverfront park in Portland's new South Waterfront district has risen 76 percent since the original estimate.
Architectural Cost Consultants' estimate based on 2004 costs pegged the project at $32 million. The public park -- better known as a greenway -- is designed to be a 100-foot-wide ribbon of biking and walking trails, a beach, plaza and fountains.
But by the time the greenway is finished in six phases after 2020, the price will be $56 million, according to a revised estimate. A consultant says construction cost inflation over the next 13 years is to blame.
In the short term, construction is supposed to start on the park's first phase next summer, and it's already $1.8 million more than the city's budget. The shortfall is likely to set off a battle over how to scale back the work.
The rising costs leave some in the area wondering whether the city's checkbook can keep pace with its dreams. "There's no way," says Bob Durgan, a frequent South Waterfront critic and consultant to Jay Zidell, whose companies own riverfront industrial land in the district. "There's a serious train wreck."
Like the aerial tram and streetcar, the riverfront greenway is a key piece of the city's 2003 deal to turn the South Waterfront area from an industrial wasteland into a $2 billion high-rise neighborhood. The greenway is supposed to provide an urban escape for people living in one of the state's most tightly packed residential neighborhood, a hangout for people from across the region and a riverbank salmon stopover.
Also like the tram, the greenway is proving to be far more expensive than first advertised.
The tram started at $15.5 million and finished at $57 million. In that case, city staff withheld information about flawed early cost projections and the project got hit with zooming steel prices.
With the greenway, the original estimate was done in 2004 dollars. It didn't include cost inflation because the city wasn't sure when the construction would start, said Patty Freeman, who is managing the greenway for the city Parks Bureau.
Designer Michael Zilis, a principal at Walker Macy in Portland, says the rising price comes from a ballpark estimate of 8 percent annual inflation for such things as fuel, concrete and steel.
Unfortunately for greenway backers, the South Waterfront isn't flush with urban renewal tax revenues like the Pearl District. Urban renewal money comes from taxes paid on rising property values. The Pearl has so much money city leaders are talking about spreading it to other parts of the city. In South Waterfront, all money through 2011 is spoken for, and there's nothing extra.
South Waterfront's greenway is eventually supposed to run from the Marquam Bridge south to just beyond the Old Spaghetti Factory. The first phase will run from Gibbs Street to Lane Street and parallel to the area's first condo towers.
Walker Macy's master plan for the first phase includes a pier and a kayak boat launch. "Right now, that available money doesn't build everything in that plan," Zilis said.
The city budgeted $7 million. The estimated cost is now $8.8 million.
The city doesn't plan to put up any more money. Some South Waterfront residents have talked about raising money privately to fill the gap.
In the future, developers and other private groups are expected to come up with 30 percent of the greenway costs. In the first phase, the private groups' share is projected at 12 percent.
North Macadam Investors, the area's lead developers, and Oregon Health & Science University paid about $1 million to build a temporary path for the condo buyers. The city now must tear out the path and regrade part of the bank to build the greenway, Freeman said.
Larry Brown, a Portland Development Commission manager, said the private share was lower in the first phase because North Macadam Investors poured money into other South Waterfront projects.
"In the end, they put $2.5 million into the tram even though it wasn't their problem to solve," Brown said. "They could have put more into the greenway, and we could have put more into the tram."
John Mangan, a North Macadam Investors spokesman, says the developers have done their job to get the greenway built. "The question is, where is the city in managing the project to completion under budget," he said.
As with the tram, developers, architects and the city will continue talks about how to make it happen. In 2004, developer Dike Dame of North Macadam Investors was asked how they'd find enough money for the greenway.
He said: "Money follows good ideas. It will get figured out."
http://www.oregonlive.com/news/orego...120.xml&coll=7
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