Jones Lang LaSalle
Builder let go in Devils arena flap
Team's owner cites a breakdown in contract talks on final price for Newark project
Thursday, June 15, 2006
BY GEORGE E. JORDAN AND MATTHEW FUTTERMAN
Star-Ledger Staff
The Devils have dismissed the management company supervising construction of its arena in downtown Newark, the team's owner and city officials said last night.
The Devils parted ways 11 days ago with BovisHunt, a leading builder of professional sports venues, after they failed to negotiate a final price tag for the 18,000-seat arena.
"We did not agree with the monetary issues," said Devils owner Jeff Vanderbeek, who insists work on the arena's steel frame continues ahead of schedule to open in time for the 2007 hockey season next October.
New Jersey's oldest construction company, Wm. Blanchard Co., is temporarily running the site, and a new a construction supervisor should be hired next month, Vanderbeek said.
"What's important is we're working to keep this project on schedule," he said.
The departure of BovisHunt highlights long-running concerns about the final cost of the arena, projected to run $310 million. It also represents the first major construction flap to spill into public since Newark handed the Devils control of the project in December 2004.
"There is something really not right about this," said Rod Taylor, managing director of Breitstone & Co., a major Long Island construction adviser with work in New Jersey. He said contract negotiations with BovisHunt should have been completed before the arena's steel frame began rising in late winter.
"It can happen, but most of the time it would have happened before they were on the job site," Taylor said of the breakdown in the final contract negotiations. "You would have to think it would have been worked out."
BovisHunt, which built Busch Stadium in St. Louis and the Arizona Cardinals' new football stadium, was selected two years ago from a field of five companies that submitted bids to Newark to oversee construction.
A spokesman for BovisHunt could not be reached last night. The company is an alliance formed two years ago between construction giants Hunt Construction Group and Bovis Lend Lease.
Under an agreement between the city and hockey team, taxpayers will provide $210 million of the construction costs and the franchise will pay the rest. In exchange, the Devils get to keep most of the ticket and concession revenue.
Mayor-elect Cory Booker has said he fears the final cost of the arena could run much higher, and suggested he may try to pull the plug on the project.
"What does it mean? It means this is a poorly conceived project, an unnecessarily rushed project," Booker said last night. "A project that is not the best use of land and city resources."
Vanderbeek, a former Wall Street executive, declined comment on Booker's threat.
Richard Monteihl, Newark's business administrator and executive director of the nonprofit group overseeing redevelopment around the arena, said the city has spent at least $80 million on the arena so far, and the balance of the $210 million in public funding is committed.
"The arena is under contract, and based on those contracts people have invested huge amounts of money. It would be inadvisable to damage the project," he said. "It would leave the city with substantial legal exposure because everyone entered into these contracts in good faith."
BovisHunt was hired under a short-term contract as "temporary" construction manager to get the project underway, while final price negotiations continued, Vanderbeek said.
"It's not like we're switching construction managers mid-stream," Vanderbeek said.
The Devils are looking for a "guaranteed-maximum price" contract, an all-inclusive construction deal popular with the sponsors of public and private developments to hold the line on cost overruns. The final price is based on underground soil analysis, design features and engineering schematics.
Manhattan lawyer Barry LePatner, a corporate construction adviser, said many construction managers would likely bid to complete the arena, a trophy project, and replacing BovisHunt would not cause construction delays.
"It is certain ownership will find a replacement to get up to speed and proceed with its schedule for completion of the project," he said.
George E. Jordan and Matthew Futterman may be reached at (973) 392-4141. Jeffery C. Mays and Ian Shearn contributed to this report.
© 2006 The Star Ledger
© 2006 NJ.com All Rights Reserved.
Builder let go in Devils arena flap
Team's owner cites a breakdown in contract talks on final price for Newark project
Thursday, June 15, 2006
BY GEORGE E. JORDAN AND MATTHEW FUTTERMAN
Star-Ledger Staff
The Devils have dismissed the management company supervising construction of its arena in downtown Newark, the team's owner and city officials said last night.
The Devils parted ways 11 days ago with BovisHunt, a leading builder of professional sports venues, after they failed to negotiate a final price tag for the 18,000-seat arena.
"We did not agree with the monetary issues," said Devils owner Jeff Vanderbeek, who insists work on the arena's steel frame continues ahead of schedule to open in time for the 2007 hockey season next October.
New Jersey's oldest construction company, Wm. Blanchard Co., is temporarily running the site, and a new a construction supervisor should be hired next month, Vanderbeek said.
"What's important is we're working to keep this project on schedule," he said.
The departure of BovisHunt highlights long-running concerns about the final cost of the arena, projected to run $310 million. It also represents the first major construction flap to spill into public since Newark handed the Devils control of the project in December 2004.
"There is something really not right about this," said Rod Taylor, managing director of Breitstone & Co., a major Long Island construction adviser with work in New Jersey. He said contract negotiations with BovisHunt should have been completed before the arena's steel frame began rising in late winter.
"It can happen, but most of the time it would have happened before they were on the job site," Taylor said of the breakdown in the final contract negotiations. "You would have to think it would have been worked out."
BovisHunt, which built Busch Stadium in St. Louis and the Arizona Cardinals' new football stadium, was selected two years ago from a field of five companies that submitted bids to Newark to oversee construction.
A spokesman for BovisHunt could not be reached last night. The company is an alliance formed two years ago between construction giants Hunt Construction Group and Bovis Lend Lease.
Under an agreement between the city and hockey team, taxpayers will provide $210 million of the construction costs and the franchise will pay the rest. In exchange, the Devils get to keep most of the ticket and concession revenue.
Mayor-elect Cory Booker has said he fears the final cost of the arena could run much higher, and suggested he may try to pull the plug on the project.
"What does it mean? It means this is a poorly conceived project, an unnecessarily rushed project," Booker said last night. "A project that is not the best use of land and city resources."
Vanderbeek, a former Wall Street executive, declined comment on Booker's threat.
Richard Monteihl, Newark's business administrator and executive director of the nonprofit group overseeing redevelopment around the arena, said the city has spent at least $80 million on the arena so far, and the balance of the $210 million in public funding is committed.
"The arena is under contract, and based on those contracts people have invested huge amounts of money. It would be inadvisable to damage the project," he said. "It would leave the city with substantial legal exposure because everyone entered into these contracts in good faith."
BovisHunt was hired under a short-term contract as "temporary" construction manager to get the project underway, while final price negotiations continued, Vanderbeek said.
"It's not like we're switching construction managers mid-stream," Vanderbeek said.
The Devils are looking for a "guaranteed-maximum price" contract, an all-inclusive construction deal popular with the sponsors of public and private developments to hold the line on cost overruns. The final price is based on underground soil analysis, design features and engineering schematics.
Manhattan lawyer Barry LePatner, a corporate construction adviser, said many construction managers would likely bid to complete the arena, a trophy project, and replacing BovisHunt would not cause construction delays.
"It is certain ownership will find a replacement to get up to speed and proceed with its schedule for completion of the project," he said.
George E. Jordan and Matthew Futterman may be reached at (973) 392-4141. Jeffery C. Mays and Ian Shearn contributed to this report.
© 2006 The Star Ledger
© 2006 NJ.com All Rights Reserved.
posted by Jones Lang LaSalle NJ News Blog at 10:30 AM
<< Home