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Study of police HQ project finds city got value for money

Audit to come later

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The audit on the $210 million police headquarters project will be presented to councillors this afternoon.

MIKE DEAL / WINNIPEG FREE PRESS FILES Enlarge Image

The audit on the $210 million police headquarters project will be presented to councillors this afternoon. Photo Store

An external review of the construction costs for the police headquarters project concluded the money spent was comparable to costs incurred by other cities for their own police headquarters.

The report by consulting firm Turner & Townsend found the square footage costs for the Smith Street police HQ were within the range incurred by four other cities.

Today’s reports follow the recent release of the EY audit on 33 real estate transactions dating backing to 2007. The EY audit did look at the purchase of the former downtown Canada Post building and the related arrangements with a local broker but it did not look at the construction and renovation work project needed to transform the complex into a police headquarters.

"Strictly from a financial viewpoint and using both detailed elemental cost analysis and benchmarking study, it is our opinion that the project value (of the Winnipeg Police headquarters project) is within the acceptable range of cost for a facility of this nature," states a six-page executive summary of the report. "Based on benchmarking study, the cost per (square foot) of the Winnipeg Police HQ project is within the anticipated range of cost for a project of this nature and program requirements."

That was good news for Mayor Sam Katz, who kept saying the same thing after council was surprised in October, with another cost overrun on the project that added $17.2 million to the project’s total cost.

"The question was asked in the seminar, ‘Did Winnipeg get good value for money,’ and the (study author) said basically yes," Katz told reporters as he rushed out of the private briefing this morning.

The value-for-money study, and an audit which will be released this afternoon, were ordered by council after a wave of negative public feedback to the project that was originally billed to cost $135 million when the city bought the former Canada Post downtown warehouse and office tower in 2009 but ended up costing $210 million, as of November.

Costs on the project seemed to climb on a monthly basis and civic administrators defended the escalating increases, describing them as the result of essential design changes.

Space in the 11-storey office tower is being leased commercially and the city hopes to recoup some of its costs by selling the tower for at least $20 million.

Construction on the building is largely completed but the police will not begin moving in until the fall, a process that’s estimated to take a further six months to complete.

The study put the project’s construction/renovation costs at $156.37 million, with an unadjusted cost per square foot of $228; lower than a police facility built in Saskatoon ($289 psf) but higher than costs incurred in Kingston ($219 psf), Niagara Region ($209 psf) and London ($205 psf).

Coun. Harvey Smith, who distributed copies of the executive summary to reporters, said there is still no explanation for why the project’s total cost was $75 million more than the original budget.

Coun. Russ Wyatt said he expects explanations for the series of project increases will be explained in the audit, which is being presented to councillors this afternoon.

"Reading and looking at (the Turner & Townsend study), there are serious questions that need to be asked," Wyatt said. "This is one part of the entire audit and until we see the rest of the audit, it’s premature to say we got value for money."

Coun. Brian Mayes said the study showed that the original, $135 million, estimate was far too low but that the final price was not unrealistic.

However, Mayes said the study doesn’t explain why the original estimate was so low, adding he understands why people are upset with the series of cost over-runs that brought the project to $210 million.

WPS chief Devon Clunis was among the last city staff to leave the private meeting, but he refused to comment until the reports are made public.

The Turner & Townsend executive summary noted that there was almost $4 million of work done on the project – change orders and site instructions – that was not included on project drawings.

While the city stated the construction/renovation costs at $155 million, the total project cost of $210 million also includes:

  • $31.5 million purchase price;
  • :$7 million construction interest.
  • $17.2 million in over-runs approved in November.

The $17. 2 million in over-runs included $2.4 million for additional security measures; $1.7 million for additional concrete work in the garage area; and $12.1 million for additional mechanical, electrical and fire protections as a result of re-designs to the project.

 

Aldo.santin@freepress.mb.ca

History

Updated on Tuesday, July 15, 2014 at 12:42 PM CDT: Updated with more information

1:08 PM: Updated

1:20 PM: Removes audit from headline; audit not yet released

2:00 PM: Updates with full writethru, adds sidebar

2:09 PM: Updated

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