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Tuesday, March 28, 2006 - Page updated at 12:00 AM

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Cost of Bellevue City Hall overrun hits $19.6 million

Seattle Times Eastside bureau

For the past year, Bellevue city officials have said the cost of the new City Hall under construction was $10 million or $11 million over budget.

On Monday, they said the overrun was about twice as big — $19.6 million — and much more complicated.

Under a settlement approved Monday night by the Bellevue City Council, the project contractor will pay or absorb $4.8 million of the $19.6 million cost overrun. All claims between the city and contractor are dropped, and their yearlong dispute over the expanding budget is over.

As part of the settlement, contractor Lease Crutcher Lewis promises to finish the remaining tasks on the project, such as landscaping, by April 28.

As recently as January, city officials said the overrun was largely because of an increase in the cost of materials, such as steel and wallboard, and was the responsibility of Lease Crutcher Lewis.

This week, city officials said the City Hall, which opened last month, ended up costing about $121 million for many reasons, including bad architectural drawings, poor construction planning and problems with the old building that was remodeled into city headquarters.

The overrun is the fault of the city, contractor and architect, SRG Partnership, city officials said.

"It was more complicated than it seemed on the surface. ... As we did more analysis ... we reached a different conclusion," said Matt Terry, the city's planning director.

City officials have known for several months that the overrun was continuing to increase but said they waited to announce the new numbers until they had a "best estimate" of the project's final cost.

Bill Lewis, the company's president, said last week City Hall was a "challenging project" and "we're feeling good about putting this settlement behind us."

The settlement leaves about $15 million of the overrun up in the air. Who will pay the extra costs?

The city already has agreed to pay about $1 million of the remaining overrun, based on extra hours worked by electricians and design changes.

The architect, SRG Partnership, is responsible for a "significant portion" of the remaining overrun, said Richard Prentke, the city's lead attorney in the City Hall cost negotiations.

The city sued the Portland-based firm last fall, alleging "errors, omissions and performance problems" by the company and its subcontractors, Prentke said. The city and architect will go into mediation in the next month in an attempt to settle the dispute.

Dennis Forsyth, a principal in the firm, could not be reached Monday for comment.

Whoever pays for the overrun, the legal dispute over costs already has hit Bellevue's pocketbook. The city expects to spend about $1.4 million on attorneys and consultants, and if mediation with the architect is not successful, a costly trial would start this summer in King County Superior Court.

Councilmen Don Davidson and Conrad Lee said Monday night they were disappointed about the escalating cost of the project. The city trimmed about $3 million from the building plan last year to make up for some of the extra costs.

"It's very unfortunate that all these good things are being watered down by this budget overrun," Lee said.

City officials say the new building was still worth all the trouble. Constructing a new City Hall from scratch, instead of remodeling an existing building, would have cost $40 million to $60 million more than the original figure of $102 million, officials said.

"People will hopefully enjoy this building for decades and hopefully forget the challenges," Prentke said. "That's what normally happens."

Ashley Bach: 206-464-2567 or abach@seattletimes.com

Copyright © 2006 The Seattle Times Company

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