Amid rising price tag, planners discuss options for Grand Forks' Career Impact Academy
The original estimated cost of the center was approximately $20 million. Inflation and other cost escalations in the past year, however, brought the estimated price tag up to about $30.6 million. A revised plan could bring the cost back down to approximately $21.8 million.
GRAND FORKS – Inflation and supply-chain problems are pushing up the projected cost of constructing the Career Impact Academy, and leaders are seeking input from stakeholders on how to address the problem.
In a video-conference meeting, industry partners who’ve committed cash and in-kind contributions to the project were updated on projected costs, building options and timelines.
Eric Ripley, executive director of career and technical education and technology for Grand Forks Public Schools, conducted the meeting. He and other project leaders were seeking reaction from industry partners on how to proceed, given the troublesome market conditions.
“This is not a fully-cooked plan,” Ripley said. “There’s an opportunity for input and feedback.”
Project leaders say they want to begin construction next spring, but “we’re having issues as it relates to escalation of costs,” said Jonathan Lowrey, area manager for PCL Construction, the contractor for the project.
The original estimated cost of the center was approximately $20 million. Inflation and other cost escalations in the past year, however, brought the estimated price tag up to about $30.6 million. A revised plan could bring the cost back down to approximately $21.8 million, said Keith Lund, president and CEO of the Grand Forks Region Economic Development Corp.
The revised figure represents cost savings gained by delaying construction of the welding lab and a community commons area and creating a more efficient building design, Lund said.
Options for consideration
Mike McLean, principal architect at JLG, outlined two options – one that shifts the construction of the welding lab and community commons to Phase 2, which would require an additional $1.7 million to $2.1 million to be raised, and another that shifts only the community commons area to Phase 2, which would require raising an additional $3.6 million to $4 million.
Other building features that are already planned for Phase 2, such as the expansion of certain labs, may need to be pushed back further, and could be completed when funds become available, Ripley said.
But the rate of inflation and current market conditions create an urgency to raise more funds for the project, Ripley said.
Lund said other funding paths could include bonding, new market tax credit, state funding, grant-writing and gap funding from the city.
“We cannot wait for the end of the legislative session,” Ripley said.
Another option would be to ask donors to commit another 10% of their contribution to the project, Lund said. In response to a question, he said, if the decision is made to make that request, it would occur this calendar year.
McLean said JLG is planning to complete work on the schematic design phase by the end of August, with the bidding process to begin later this year.
Taking into account an estimated inflation rate of 1.25-1.5% per month, McLean said the project would realize a $1.3 million cost savings if materials, such as steel, foundation and footings, “are bid this year and construction can begin as soon as possible in spring ‘23.”
Those who attended the meeting made no decisions regarding the options presented. A webinar is planned for Aug. 19, when the group will examine its options in more detail, Ripley said.
Barry Wilfahrt, president and CEO of the Chamber of Commerce of Grand Forks and East Grand Forks, encouraged the group to coordinate lobbying efforts aimed at the Governor’s Office with local lawmakers.
The governor’s budget will be released in 10 weeks, Wilfahrt said. “The sooner we get our legislators working on that, the better, (but) it has to be done carefully, so as to not create a firestorm.”
When completed, the Career Impact Academy will provide area high school students and adults with training for jobs in high-demand fields such as the building trades, nursing and other health professions, computer science, robotics and engineering and the culinary arts.
The facility will be built on the site of the former Grand Forks Inn and Suites near the intersection of Highway 2 and North 42nd Street.
About $11 million, in cash and in-kind contributions, has been raised from the private sector for the project’s construction in order to qualify for $10 million in matching funds from the state.
“We were one of the more successful communities throughout the state” that sought to qualify for the government funds, Lund said. The state offered up to $10 million for each project aimed at educating and training workers to enhance the state’s economic vitality.
The Grand Forks project ranked second, behind Dickinson, among the seven projects that applied for and received the grants, Lund said.
In this area, Grafton also qualified to receive a grant, $4,752,290, from the state for a similar workforce training and development project.