Other ACC projects also experiencing price hikes
Members of Alamance Community College’s building and grounds committee learned this week that the cost for construction of ACC’s third bond project – a public safety training center in Green Level – is currently estimated to exceed $22 million, more than double the original estimated cost of $10.4 million to build the training center.
ACC’s building and grounds committee – comprised of trustees Steve Carter, also vice chairman of Alamance County’s board of commissioners; Tony Foriest; Pete Glidewell; and Blake Williams – met Monday afternoon to discuss the latest construction cost estimates for the project with representatives from the contractor, Samet Corporation, and the architectural firm, Moseley Architects.
The public services training center is one of several new construction projects to be funded by the $39.6 million bond package that voters approved for ACC in November.
“We’ve been hit hard with [cost] escalation,” ACC president Dr. Algie Gatewood acknowledged in a subsequent interview with The Alamance News. “The new price for what we budgeted for – the classroom building, burn pit, training tower, driving pad, and indoor shooting range and the amenities to go with those items – exceeds $22 million. That’s the estimate.”
“This is beyond the control of the [building and grounds] committee or the college,” Gatewood said Tuesday morning. “According to Samet and Moseley, this is happening with projects on an industry-wide basis. They said labor [costs] may settle down, but they don’t foresee the prices going down.”
In addition to signing on as the builder, Samet is serving as a construction-manager-at-risk (CM at risk) for ACC’s public safety training center. The CM-at-risk is a construction delivery method in which the contractor works with architects to develop cost estimates during the design phase in order to keep the overall cost for construction at or below budget, according to the state Department of Administration, which oversees construction of public buildings in North Carolina.
Gatewood also acknowledged in the interview Tuesday that it’s unlikely that he and other ACC officials will return to the well – i.e., by asking Alamance County’s commissioners to provide additional funding for the public safety training center, which is planned for 96 acres of land in Green Level that Martin Marietta Materials of Raleigh owns.
ACC will pay Martin Marietta a total of $18,917 to lease two parcels, beginning in the fourth year of a 50-year term; the company has agreed to let ACC use the property at no charge for the first three years.
The plans call for construction of a 15,000-square foot building on the larger, 57.5-acre parcel near the southwest corner of the intersection of N.C. Highway 49 and Sandy Cross Road. The building will house a shooting simulator space, driving pad, several classrooms, and an indoor firing range. A smaller parcel, 33.5 acres of swampland, will be used for search and rescue training exercises, as outlined in the terms of the lease.
Alamance County commissioners agreed earlier this year to infuse an additional $2.5 million into the budget for the public safety training center, with $2 million coming from capital reserves and $500,000 from the county’s share of federal stimulus funding through the American Rescue Plan Act (ARPA) of 2021. The commissioners designated the ARPA funding to be used for water/sewer and broadband internet connections to the site.
Inflation in construction costs an ongoing challenge for ACC
Meanwhile, ACC officials have repeatedly signaled since mid-2019 that the scope for several bond projects might need to be scaled back due to rising construction costs.
A parking expansion, originally envisioned as a free-standing, $8.4 million parking deck, has since been scaled back. ACC’s trustees later agreed instead to build 350 traditional “surface” parking spaces beside the forthcoming Biotechnology Center of Excellence currently underway at the northeast corner of ACC’s Graham campus.
The parking project and Biotech Center of Excellence were also merged into a single project, with a total budget of $19.4 million, after bids for construction of the biotech center began coming in at an average of 15 percent over budget.
ACC officials previously asked the commissioners in August 2021 for an additional $3.1 million to cover cost overruns for the first two bond projects: the biotech center/parking expansion and a forthcoming student services center that will face Jimmie Kerr Road, originally estimated at $6.2 million. Alamance County’s commissioners agreed last August to add $1.9 million to the budget for the center of excellence and $503,500 to the budget for the student services center.
Rather than hit the commissioners up for more money again, Gatewood told the newspaper this week that ACC officials most likely would look at pursuing grants to bridge the $9.6 million gap between the revised budget of $12.4 million and the current estimated cost of $22 million cost to build the public safety training center.
At the same time, Gatewood predicted that, based on current U.S. economic trends, costs for construction and raw materials “are more likely to go up than down.”
“It’s pretty clear, even in the residential market, prices are going up,” Gatewood said.
The Associated General Contractors of America (AGC), a trade association representing more than 6,500 builders in the U.S., earlier this year reported an average increase of 20.7 percent in nonresidential construction costs, based on the producer price index (PPI) measured between December 2020 and December 2021 and published monthly by the U.S. Bureau of Labor Statistics. (See accompanying chart for a breakdown of cost increases for specific materials used in construction.)
However, Gatewood said Tuesday that he hasn’t asked Alamance County’s commissioners about the possibility of putting another bond referendum for ACC on the ballot to supplement funding for construction of the public safety training center or any of the other projects that were included in the 2018 bond package.
“I don’t have any immediate plans to speak with them about another bond measure,” Gatewood added. “I think it’s a great time for the college to seek external funding. I’m particularly interested in pursuing a grant; we’ve been very successful with grants.”