GloucesterTimes.com, Gloucester, MA

May 23, 2013

Fort work on hold for a year

City concedes issue is beyond hotel appeals

By Marjorie Nesin
Staff Writer

---- — A shovel was supposed to strike the ground this spring for a series of upgrades to the Fort neighborhood’s water and sewer infrastructure.

But that major construction project, now with an increased price tag, will be delayed for at least another year, city officials now say — and not just because of appeals being filed regarding the planned Beauport Gloucester hotel project.

In a memorandum to city councilors this week, the mayor’s office will announce intentions to put off the infrastructure work until at least next spring, consequently letting go of the $3 million MassWorks grant for the major infrastructure replacement. The state had required that the hotel project break ground by the end of spring in order to receive the grant, which is also contingent on the 150 jobs that the Beauport Hotel was projected to create.

Though city officials had urged opponents not to appeal the hotel project — saying that appeals would put the MassWorks grant at risk — the city itself has yet to put out a contract for construction bids on the infrastructure project. And Mayor Carolyn Kirk’s office delayed a request for the City Council to authorize bond money for the project three weeks ago, before any appeals rolled in, according to the mayor’s Chief Administrative Officer Jim Duggan.

“It was coming to light a little quicker that potentially it’s probably in the best interest of the project, of the neighborhood, of the businesses down there, that we postpone this until next spring,” Duggan said Wednesday.

Attorney Michael Faherty — whose client, Mortillaro’s Lobster Co., has filed an appeal against the Conservation Commission’s finding to approve the hotel proposal — said Wednesday that he knew the city had not been prepared to break ground on the project and had been surprised when city officials, including both the mayor and Councilor-at-large Bruce Tobey, wagged their fingers at any potential appeals.

“I was very surprised by the mayor’s comments that she made in the paper, stating that somehow or other the failure of the city to start the process, including the bidding of contracts, and things of that nature, were due to something that my client did,” Faherty said. “I’m surprised and would like to know how they got the grant in the first place since the project was not shovel ready.

“I’m not surprised they weren’t shovel ready,” he said. “I never thought they would be.”

While Duggan said appeals filed in court by hotel opponents did put the city at risk of losing the state grant money for this construction season, he said the situation was further complicated by the increase in expected price for the project from what was once $5.5 million, then $7 million, and is now pegged at a projected $7.5 to $8.5 million. That hike came after a closer look at the infrastructure revealed more issues than the city initially anticipated.

“Once we had really the in-depth examination of the project, by having a consultant come in and the DPW director and city engineer really looking in great detail, that’s when other costs were brought up that weren’t originally anticipated for,” Duggan said. “As you got into it and you examined the current condition of the infrastructure, that’s what really escalated it up.”

The $3 million state grant, plus a total of $2 million that Beauport LLC. has agreed to kick in, and another $1 million in the city’s surplus from last year’s budget — known as “free cash” — would have covered the bill on the first estimate. And, after the most recent estimate, the mayor had intended to request the council approve bonded money to foot the remainder of the cost, but delayed that request three weeks ago, and it never rose again.

The city now must forfeit the state’s $3 million grant and reapply for the money, hoping to have it reallocated to Gloucester next spring. Whether the state grants that money to Gloucester again would be out of the city’s hands. Meanwhile, city administrators began meeting Wednesday to decide on which city projects will receive the $1 million in “free cash” that had been set aside for the infrastructure project.

“What we’ll probably do is look at where we can reinvest that money into other projects throughout the city,” Duggan said.

Duggan said city administrators had been “concerned” about the tight squeeze of time constraints, and they began to think waiting on the project might hold benefits, giving the city a better chance at getting a quality contractor by releasing the bid for contracts over winter, longer before the construction season for which the work would be contracted.

He added that, as the office has continued discussions with the state, the state has not indicated that the grant situation is now or never.

“They’ve given no indication whatsoever that if we don’t use this, there’s no funding in the future,” Duggan said. “They completely understand the situation. And the door is still completely open here.”

Marjorie Nesin can be reached at 978-283-7000, x3451, or at mnesin@gloucestertimes.com.