Inflation and Material Shortage Push Up Cost of New Heritage Center | national news
The price of the new Montana Heritage Center currently under construction in Helena has risen from $ 52.7 million to a projected $ 72 million, and officials cite inflation, rising supply costs, supply shortages and labor issues as the reasons for this increase.
People affiliated with the project said they are taking steps to cut costs while creating a facility that remains warm and welcoming. And they note that the money collected for the new facility comes from a tourist tax and is not a burden for property taxes.
Although the expected cost is higher, the project budget remains at approximately $ 63.7 million. This represents a 21% increase in the budget, and officials said they hope to achieve that figure by “working on a value engineering process to reduce costs.”
Marty Byrnes, lead architect for Cushing Terrell, who designed the project, said costs started to rise in May, when the construction industry began to feel the impacts of COVID-19. When the pandemic first hit, there were stocks of materials.
He said the price of lumber had “gone crazy” by then. Byrnes said the materials were affected and it affected the workflow.
“The pent-up need for it all combines to create a disaster,” he said, adding that the market swings of 2003 and 2008 are nothing compared to what the museum has been through in recent months.
Byrnes said efforts have been made to get as many bidders as possible. He said some work, such as installing elevators, was considered too small a project by some companies, and there had been no bids. Officials offered an example of cost reduction by switching from 5-by-9-inch floor tiles to polished concrete. They also said volunteers could cut costs by helping with native plants for landscaping, for example.
It has even impacted projects such as window glazing, in which there is now a lack of silicone, he said.
Some projects have been re-offered to ensure lower costs.
“From my perspective, we’re on the right track,” Byrnes said. “We made our way through a bump in the road. “
He said officials were taking measures such as trying to stockpile the materials and sort out problems before they arise.
The floor was inaugurated on September 2, 2020 on the new 6th Avenue and Roberts Street structure, directly across from the State Capitol, and it will adjoin the current Montana Historical Museum. It came after an effort of almost 14 years.
The new design includes $ 32 million in additions and renovations to the current Montana Historical Society building. It includes an entrance plaza facing the Capitol, an indoor cafeteria, an outdoor patio, an event center and a large gallery, officials said. The project is expected to be completed in early 2024. It will be funded by $ 7.5 million in government bonds, $ 42 million in public funding and $ 15 million in private funds. The legislature gave the historical society the power to raise up to $ 30 million in private funds.
“We can go back to the Legislature to ask for additional funds, but we prefer to explore other options,” historical society officials said.
Officials said inflation had hit other projects in Montana as well. They said the Montana State University wellness center was valued in May 2020 at $ 60 million, but the lowest bid in August 2021 was $ 78.25 million. They said the scope of the project had not changed, but inflation, extreme prices and material shortages caused by the pandemic added to the higher costs.
Those who work at the heritage center said they remain committed to ensuring that the new facility provides a warm and welcoming atmosphere to visitors.
Byrnes said it would remain a “landmark” building.
“Is this a Cadillac?” No, but it’s a good, solid Chevrolet, ”he said.
Museum director Molly Kruckenberg said the board was aware of the cost projections and in October approved the raising of $ 15 million in private funds to help offset the costs. As of July, nearly $ 7 million had been raised from donations and foundations.
“We will be as profitable as possible,” she said. “But we won’t deliver a substandard product. “
“This is the first chance in our life to have a building to tell the story of Montana,” she said.
Byrnes said as a taxpayer he believed the money was well spent.
“As a taxpayer, I can look someone in the eye and say we did the right thing,” he said.
Brynes said that in all of his years in architecture, this remains his favorite project. He said the steel frame will begin to rise on January 17.
“Once the steel rises, that will be the talk of the town,” Byrnes said.
The Montana Historical Society was founded in 1865 to preserve documents, artifacts, artwork, and other items that are integral to Montana’s cultural and political history. It was incorporated as a state agency in 1891 by the legislature.
It is estimated that the new heritage center will attract 78,000 more visitors per year and create an additional $ 7.5 million in annual tourism spending.
The 59th Montana Legislature (2005) passed Bill 5, which allowed the Montana Historical Society to seek up to $ 30 million in private donations, and Bill 540, which authorized $ 7.5 million in general obligation, for the Montana Historical Society construction project. .
These funds helped advance initial planning, but were not sufficient to finalize designs or begin construction. Currently, there is $ 6.7 million in reserve of this initial allocation to be spent on design and construction.
In 2019, Montana’s 66th Legislature passed the bipartisan Senate Bill 338, the Montana Museums Act of 2020, and House Bill 5, which added approximately $ 37 million (projected) to the budget. Montana lodging tax funding. SB 338 added an additional 1% to the 3% sales tax on facilities used for public accommodation to fund the new Montana Heritage Center and to create the Historic Preservation Grants Program.
The law also provides grants to local museums and cultural institutions across the state. In 2021, Montana’s 67th Legislature passed Bill 2, which added an additional $ 4 million to accommodation tax funding, for a total of $ 41 million.
Senator Jill Cohenour, D-East Helena, said she believes there is still great support for the new heritage center.
“It took a long time to get to the point of financing the building,” said the Senate Minority Leader, adding that the sharp rise in costs could not have been anticipated.
“We need it, this is Montana history,” she said.
Cohenour said the governor’s office may be in favor of granting the center the America Rescue Plan Act (ARPA) fund.
She noted that the heritage center legislation was also helping other historical societies and museums in the state, and that they were also likely considering higher costs for the projects.
“If we say it’s a worthwhile effort, it’s a worthwhile effort for the whole state,” she said.
Kruckenberg said she was very optimistic about the completion of the project.
“I don’t see how we’re not going to finish this building,” she said. “I don’t see anything that would prevent us from completing it.”