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Appeal of Wheeler project bogs down new Capitol gateway
The state's $141 million Heritage Center, envisioned as a new gateway to the Capitol, could be held up because of delays and a $110 million cost increase in a project on the other side of the Capitol Campus.
The folks at the Secretary of State's office would like to be thinking about state-of-the-art exhibit techniques such as theater chairs at Mount Vernon that vibrate during Revolutionary War battle scenes, and the displays of Watergate relics at the National Archives in Washington, D.C.
Secretary of State Sam Reed has championed the center, which would include a museum, event space, and a cafe, in addition to the State Library and Archives.
But construction of the center isn't scheduled to start until the east side project near Wheeler Street is finished.
That project, a new data center and offices for the state, is stalled during an appeal by neighbors of the state's plan to deal with the traffic it will add to the campus entrance.
And the project's cost estimate has gone from $260 million last year to $370 million.
Whether the issues will delay the Heritage Center and the related $80 million Executive Office Building is unclear, but nerves have been rattled.
"I think the Secretary of State should be worried. I don't blame him at all," said Rep. Bill Fromhold, the chairman of the House Capital Budget Committee.
Reed said he's made a firm commitment to the Legislature and the people he's asking for donations to support the project: "This is what we're going to do. We're going to do it on time. Well, on time is a little bit more of a challenge."
The Legislature, prompted by Thurston County Democratic Sen. Karen Fraser, first spent money on designing the Heritage Center in 2005. It is scheduled to be finished in 2012.
In contrast, the first money for the eastside project, known as the Wheeler project, was authorized last year. It's scheduled to be completed in 21 months.
The hurry is driven by logistics. The new buildings at the east end of the campus need to go up so the agencies now in the General Administration Building will have a place to go.
That 1950s building will be demolished to make room for the Executive Office Building - a new home to state officials and workers - and the Heritage Center, which will be set into the bluff above Capitol Lake.
"Joined at the hip, they are," said Fromhold.
When Reed's team came back this year asking for authority to spend another $22 million, Fromhold said he was concerned.
Project items left out
Reed says the change in figures, from $113 million to $135 million, is not really a cost overrun.
When the Legislature considered a package of construction proposals, it approved the Heritage Center and the Executive Office Building.
Lawmakers passed on a general office building and a parking garage nearby.
But in funding the two projects, they left out parts of the other proposals that still had to be done, like major improvements to the electrical service and utilities at the site, building a loading dock, and money to pay for demolishing the General Administration Building.
"Once everyone realized what happened last session, they went and fixed it," said Assistant Secretary of State Steve Excell said.
In addition to adding $22 million to the Heritage Center and $4 million to the Executive Office Building, however, Fromhold pushed a $6 million effort to come up with a backup plan.
The Heritage Center is supposed to be paid for with rents paid now by the State Library and Archives, as well as a $2 filing fee for real estate transactions and a $5 fee on incorporation filings.
Fromhold said he wanted Reed's office to have a plan in case those fees don't bring in as much as expected, or if the cost of the project goes up.
The budget passed this year specifically says the tens of millions of dollars Reed plans to raise from private donors cannot be used to cover construction expenses.
"I was worried," Fromhold said. "I met with all the parties during the legislative session, and we came up with that language and put in the capital budget just to be helpful, so there wouldn't be any problem. But now with this Wheeler problem, it could be a problem for Heritage."
42 percent increase
Meanwhile, the Wheeler site has encountered problems. The Department of Information Services is heading the effort to build a data center, new headquarters for its operations – now scattered through 10 buildings in Olympia – and the office building to hold the state patrol.
After a development firm was hired in November, the project changed and went up in cost by 42 percent. The data center would need more power and was shifted to a two-story version. Study of the site showed an underground parking garage would be needed. The proposed buildings were increased in size. And a traffic analysis recommended installing a roundabout at the intersection of 14th Avenue and Jefferson Street.
"We know that we've priced it correctly. This is what the realistic costs are," said Joanne Todd, information services spokeswoman. "Now we as a state and as leaders and as analysts, we have to sit down and say, 'What do we want?' "
Increased rent charged to the agencies could cover the cost increase and still keep the rates within 110 percent of average for the office buildings, but costs would be higher for the computer center, Todd said.
But state Treasurer Michael Murphy, never a fan of the lease-to-own financing plan in the first place, blasted the project's budget at a meeting of the State Finance Committee last month.
And residents of the nearby South Capitol Neighborhood appealed the traffic plan, saying the state is low-balling estimates of how many cars the new 925-car garage will add to area streets.
A meeting among state officials, the contracted developer and residents is scheduled for next week. Actual groundwork was supposed to have started by now, and any more delay is likely to drive more cost increases.
The troubles of the Department of Information Services project are prompting nervousness in the Legislative Building, where Reed and his team are still developing fundraising plans for the Heritage Center.
"We have to be careful that if it's not our problem, we don't wear it," said Excell. "Because we're out there in the donor community, and they want to know that we're basically on track and on schedule. And sometimes they don't pay attention to Olympia details."
The private donations will fund much of the public exhibits in the Heritage Center. Excell recently visited the Library of Congress, the National Museum of the American Indian, the National Archives and elsewhere looking for the latest in museum style.
They want to bring it home to Olympia, where the Heritage Center will hold the original state Constitution and other rare items.
"We are actually ahead of where (the Wheeler project designers) are in terms of where we are with the architects, in setting up contractors, in doing all the groundwork and public community meetings, in terms of all the meetings," Reed said. "In terms of what we can control, at least, we are way ahead of the plan."
The Department of General Administration is looking for a backup plan in case it and the state patrol have to move out of the GA Building before the Wheeler project is completed.
And the Office of Financial Management is going through the budget estimates for the Wheeler project, hoping to finalize a plan before the Finance Committee meets again in July, said office spokesman Glenn Kuper.
"We do anticipate that as soon as the (appeal) process is resolved — boom — we're moving," he said.
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