The city’s George Street Parkade, which serves as the foundation for the Park House Condo Development, is currently $9.8 million over budget.
City staff have released a full report breaking down the project costs. The original estimated cost for the parkade was $12.6 million which was based on a quantity surveyor’s estimate in the summer of 2017.
The new estimated cost of the parkade, located at the corner of George Street and Sixth Avenue, is $22.5 million.
The report explains that the addition permanent de-watering system, altered design for maximum site coverage, unforeseen circumstances in construction and an increase in U.S. tariffs all contributed to the cost overruns.
The Park House Condo developer’s plan was to construct a four-phase development of 160 residential units and phase one which consists of 37 residential units has been completed.
However, a key component of the project was, as part of the sale and partnering agreement with the developer, the city entered a design and build contract to construct the parkade.
The report explains that in February 2018 due to engineering concerns regarding groundwater the design for the parkade was changed to include a permanent dewatering system – which increased the project cost to $20 million.
Then in Sept. 2019, the developer provided further updates on tender prices for mechanical, electrical fire suppression and membrane roofing materials which increased the cost to $22.5 million,
A cost breakdown table of the George Street Parkade. (via City of Prince George) At the Nov. 18, 2019 Finance and Audit meeting, the Standing Committee received a financial report on significant capital projects, which contained the George Street Parkade construction costs, showing the total actual as of Nov. 5, 2019, at $16,372,186.
City council took notice of the project overruns in the summer when the city’s annual report was released, when at that time the project was listed at $5.3 million dollars over budget.
At city council’s Aug. 31 meeting, Coun. Brian Skakun requested the full report on the breakdown of the George Street Parkade be brought back to council for review.
City manager Kathleen Soltis, who had the delegated authority to approve the project overruns, parted ways with the city in September.
Then in November, as a result of the cost overruns on numerous city projects, city council changed its financial guidelines to limit the amount of funds that could be approved for a project without council approval.
In a report to council dated Nov. 13, 2020, administration recommended to the Standing Committee on Finance and Audit that the city manager’s capital budget transfer approval be reduced to the lower of 5 per cent of the capital project budget, or $100,000 per project.
City Council approved the recommendation at the Nov. 23 council meeting.
The approved reduction in the city manager’s capital budget transfer approval creates a more transparent process where city staff must seek council’s approval for capital project expenditures over the threshold.
The George Street Parkade will also serve as the foundation and services for a new childcare facility, YMCA Park House Care and Early Learning Centre, which will be built above it, with construction to commence Spring 2021.
The city received $4 million in grant funding for this project from the Province’s BC New Spaces Fund and the Union of BC Municipalities Community (UBCM) Child Care Space Creation Program.
City administration also reports that based on today’s portion of the tax rate after the 10-year tax exemption has expired and once the four phases of the Park House Condo Developer’s project are complete, it is estimated the city will receive $36 million in municipal taxes for a 40-year period.
In the report, city staff say the George Street Parkade development provided the city with the opportunity to sell vacant surface parking lots for development sites like the Marriott and Hyatt Hotel sites, and encouraged the development of the downtown student housing project.
City council will discuss the George Street Parkade report at tomorrow night’s (Dec. 7) city council meeting which starts at 6 p.m. and can be live streamed through the city’s website.
