GRAND FORKS — Inflation and supply chain issues are driving up the projected cost of building the Career Impact Academy, and executives are seeking input from stakeholders on how to address the issue.
In a meeting via videoconference, industry partners who have committed cash and in-kind contributions to the project were briefed on expected costs, construction options and timelines.
Eric Ripley, executive director of vocational and technical education and technology for Grand Forks Public Schools, led the meeting. He and other project managers were seeking feedback from industry partners on how to proceed, given the tough market conditions.
“It’s not a fully prepared plan,” Ripley said. “There is an opportunity for input and feedback.”
Project leaders say they want to start construction next spring, but “we’re having issues with escalating costs,” said Jonathan Lowrey, regional manager of PCL Construction, the project’s contractor.
The initial estimated cost of the center was approximately $20 million. Inflation and other cost escalations over the past year, however, have pushed the estimated price to around $30.6 million. A revised plan could bring the cost down to around $21.8 million, said Keith Lund, president and CEO of Grand Forks Region Economic Development Corp.
The revised figure represents cost savings realized by delaying construction of the welding lab and a common community area and creating a more efficient building design, Lund said.
Options to Consider
Mike McLean, JLG’s lead architect, outlined two options – one that moves construction of the welding lab and community commons to Phase 2, which would require raising an additional $1.7-2.1 million, and another which moves only the community commons area to phase 2, which would require raising between an additional $3.6 million and $4 million.
Other construction items already planned for Phase 2, such as the expansion of some 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 are creating an urgency to raise more funds for the project, Ripley said.
Lund said other avenues of funding could include surety bonding, the new market tax credit, state funding, grant writing and city match funding.
“We can’t wait for the end of the legislative session,” Ripley said.
Another option would be to ask donors to commit an additional 10% of their contribution to the project, Lund said. In response to a question, he said that if the decision was made to make this request, it would happen this calendar year.
McLean said JLG expects to complete work on the schematic design phase by the end of August, with the tendering process expected to begin later this year.
Factoring in an estimated inflation rate of 1.25 to 1.5 percent per month, McLean said the project would yield cost savings of $1.3 million if materials, such as l ‘steel, foundations and footings,’ are proposed this year and that construction can begin as soon as possible. in spring 23.
Those who attended the meeting made no decisions about the options presented. A webinar is scheduled for August 19, when the group will explore its options in more detail, Ripley said.
Barry Wilfahrt, president and CEO of the Grand Forks and East Grand Forks Chamber of Commerce, encouraged the group to coordinate lobbying efforts targeting 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 to work on this the better, (but) it has to be done carefully, so as not to create a firestorm.”
Once completed, the Career Impact Academy will provide high school students and adults in the region with training for jobs in high-demand fields such as construction trades, nursing and other health professions, IT , robotics and engineering and 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.
Approximately $11 million in cash and in-kind was raised from the private sector for the construction of the project to qualify for $10 million in state matching funds.
“We were one of the most successful communities in the entire state” seeking to qualify for government funds, Lund said. The state has offered up to $10 million for each project to educate and train workers to improve the state’s economic vitality.
The Grand Forks project ranked second, behind Dickinson, among seven projects that applied for and received grants, Lund said.
In this area, Grafton also qualified to receive a $4,752,290 state grant for a similar training and workforce development project.