Development at the final lot on the former Lower Hanel Mill site has been delayed a year, while the Port of Hood River reworks a project bid for grading and paving work for the last of four industrial lots on the site.
The lot, officially called Lot 902, is the largest of four owned by the Port of Hood River at the Lower Hanel Mill site in Odell. Three of the four lots on the site are currently shovel-ready, but work to prepare Lot 902 for sale was delayed due to difficulty securing a permit to develop a wetland on the lot. The port secured the permit from the Oregon Department of State Lands in April and intended to have the grading and paving project completed this summer.
However, the port commission decided to delay the project after receiving bids that were all significantly over the engineer’s estimate for how much the project would cost. The delay means that work will begin July 2020 at the earliest.
HRK Engineering and Field Services, the engineering firm that has been working with the port on Lower Mill development since the port purchased the property in 2015, put together the engineer’s estimate for the project —approximately $299,000 — back in April. The estimate was updated to $321,990 just prior to bidding and, after the project went to bid, HRK provided a new estimate, which was closer to $400,000.
The lowest bid came in at $484,443.
Carlos Garrido, the owner of HRK Engineering, told the commissioners that they typically cancel all bids in this type of situation, “but I can’t tell you what to do here,” he said.
According to Anne Medenbach, development and property manager for the Port of Hood River, the estimate was so far off because the engineer neglected to include the prevailing wage into the estimate, which increased the estimate by approximately $60,000, and because rock prices increased during the construction season.
“We’re going to have to switch something, because I can’t have this as a commissioner,” said Commission President John Everitt. Addressing Garrido, he added, “You can’t miss $60,000.”
The port’s budget for the 2019-20 fiscal year reflects the $300,000 estimate, but Medenbach gave the commissioners the option to pull from contingency funds allocated for other projects in order to accept a bid this year.
With construction prices continuing to rise, Commissioner Kristi Chapman advocated for reconfiguring the budget to accept a bid this year.
“That’s my biggest fear, is that I haven’t seen construction prices go down,” said Chapman.
The decision whether or not to push the project forward a year ultimately came down to the renewability of the wetland permit from the Oregon Department of State Lands.
The permit expires in April 2020, but because this particular type of permit is rarely issued, port staff didn’t know how, or if, it could be renewed.
“I know the hoops Anne has gone through to get that permit,” said Chapman, “so I don’t want to jeopardize that.”
While Commissioner Hoby Streich expressed concerns about pulling money from existing line items in the budget, he said, “That timeline on the permit concerns me more than going back and modifying the project.”
He added, “I don’t feel comfortable with this project, I don’t feel happy with this project, but I think for the best interest of our constituents, we need to move forward.”
The commission approved a motion to accept a bid, pending confirmation of the renewal process for the wetland permit — allowing the commission to come back and reject all bids if port staff learns that the permit can be renewed.
Medenbach confirmed later that week that the permit automatically renews on the same terms as the original, and the commission reconvened on Aug. 30 to formally reject all bids.
Given the short notice, Chapman and Streich were the only two commissioners there in person; Commissioner Ben Sheppard attended via speaker-phone to make it an official quorum.
Chapman reiterated her concern about rising construction costs, but reluctantly agreed to cancel all bids for this year.
“I know that the engineering firm royally screwed up their bid,” she said, “(but) every time we step back … we lose time and money.”
“My biggest concern is that I don’t feel comfortable pulling capital out of line items on the budget,” said Streich, adding that the decision to delay the project will likely cost the port more money in the long run, “but I think it’s a more responsible usage of the port’s money.”