Projected NLR plaza costs grow about $1M

Higher-than-anticipated construction bids and an increase of a percentage-based architectural fee have pushed the cost of North Little Rock’s planned Argenta Plaza to $5.365 million.

The city has the funds to cover the increase from the previous estimated cost of $4 million, according to proposed legislation.

Mayor Joe Smith said Wednesday that the higher price tag is justified because of the rising costs of construction and the number of ongoing projects in central Arkansas also pushing up prices.

The mayor said he

doesn’t want to skimp on the features of the planned public plaza at Fifth and Main streets, a project he’s personally promoted to become a center point of downtown. Potential bidders weren’t allowed to delete “the more expensive things” featured, Smith said.

“My goal was to make this have the ‘wow’ factor, and I didn’t want to start butchering it and turn it into a normal pocket park on

Main Street,”

Smith said.

“What I’ve heard in the last two to three years is let’s build something nice, and that’s what we’re going to do,” he said.

The City Council will consider two corresponding resolutions at a meeting Monday night regarding the increases.

One resolution seeks to revise the estimated construction cost of the plaza, after construction bids were received, by another $665,500 to $4,665,500.

The other resolution seeks to raise the price paid to Taggart Architects for design services and construction supervision by $299,825 to a total of $699,825, or 15 percent of the total project cost. The City Council approved setting the 15 percent fee in 2017, appropriating up to $400,000 to Taggart at that time.

The increases in the construction cost and the resulting rise in the architect’s fee must be figured into the total project cost, driving that figure to $5.365 million, instead of the plaza construction cost by itself, city Finance Director Karen Scott said. The $4 million figure has previously been listed in different pieces of plaza-related legislation as the total project cost.

“You have to include Taggart in the total project cost,” Scott said. “It [the plaza] doesn’t happen without it.”

Smith said he thought that was understood to be the case. But three City Council members reached Wednesday said each had considered the previous $4 million figure to be all inclusive.

“My understanding was that [architect’s] cost was built into the construction cost,” council member Maurice Taylor said. “That’s going to be a concern for me.”

Council member Debi Ross also said she believed the $4 million “would cover everything.”

“That was my impression,” Ross said. “That was the amount given. My interpretation was that was to cover everything. Maybe I didn’t dig deep enough or ask as many questions as I should have.”

Council member Charlie Hight agreed.

“I certainly thought it was,” Hight said of the $4 million estimate covering all costs. “I thought it was all-inone.

“I’m thinking if the mayor will explain his math I think it will all fall into place,” Hight said. “I’m thinking that Taggart was already included.”

Smith said that having the City Council consider different pieces of legislation in the past for the plaza and the architectural fees, then later for a construction management contract, that he considered separate costs were “made perfectly clear to everybody, especially the City Council.”

The City Council passed a resolution authorizing an agreement with Alessi Keyes Construction on May 14 for construction management and for general contractor services for the plaza’s construction. The resolution stated that the “total project costs are estimated to be $4,000,000.”

The $4 million figure was an estimate that came after the announcement in September of the plaza’s design and features, including founare tains. Before that, the estimated budget was $3 million.

According to the original legislation to enter into a contract with Taggart, approved April 24, 2017, the architect’s fee was included in the plaza’s then-budgeted amount of $3 million, though there was conflicting language between the resolution approved and the “standard form of agreement” attached to the legislation.

Section 1 of the resolution stated: “Total project costs are estimated to be $3,000,000, and compensation and fees for all services provided under this Resolution shall not exceed fifteen percent (15%) of the total project cost.” That matches the language in the new legislation that says the Taggart agreement was “not to exceed $400,000.” The $400,000 total isn’t specifically listed in the 2017 agreement or resolution, only the 15 percent figure.

However, Article 1 of the 2017 agreement reads: “The Stated Limitation of the Cost of Work (SLCW) shall be $2,600,000, including a 15 percent compensation fee.” That would mean the plaza construction budget would have been $2.26 million with a 15 percent fee of $339,000 for a $2,599,000 total project cost.

The funds to cover the increases, according to the two proposed resolutions, will come from about $559,000 in recent sales of city-owned real estate and from unappropriated funds available in a Special Projects Infrastructure Fund. The city has been budgeting the plaza’s construction out of $2.6 million in a Sales Tax Capital Improvement Fund and $1.4 million in the Special Projects Infrastructure Fund, Scott said. The city has spent $735,000 in plaza expenses to date, all out of the $1.4 million fund, Scott said. The recent real estate sales, which include the sales of property behind the plaza to First Orion Corp., for that company to build its new headquarters, has brought that fund back up to $1.48 million, she said. The $2.6 million is still untouched, she said.

Revenue collected from real estate sales in the past few years have been “specifically set aside for the plaza’s construction, city spokesman Nathan Hamilton said.

“I think with the ability for us to be paying for the additional amount with what we made off our land sales, the First Orion building and others, I think the council will understand,” Smith said of the cost increases.

“That doesn’t even include all our property sales. There the two other pieces of property around the plaza that we haven’t sold and closed on yet. Those will go back into that account, too.”