Seawall project $71 million over budget

Seattle officials say they need to increase the city’s budget for its Elliott Bay Seawall replacement project by $71 million — nearly 21 percent — due to higher than expected construction costs. Work on the mammoth endeavor began in 2013.

Part of the project will be postponed at least a year and design components of the city’s planned new downtown waterfront park will be delayed, Mayor Ed Murray said.

Murray called the situation unfortunate but insisted the city will be able to manage the additional costs without raising new taxes. The mayor said he’ll propose those changes to the City Council. The seawall project, to date, has been mostly funded by a $290 million bond measure that Seattle voters approved in 2012.

The increase would raise the cost from $339.2 million to $410.2 million.

“We will use Real Estate Excise Tax receipts and bond against the commercial-parking tax, both of which are currently unallocated sources of funds,” Murray said.

Bonding against parking-tax revenue is the same strategy the mayor said in May he wanted to use to pay for infrastructure projects such as a new Ballard Bridge.

The old seawall, built between 1916 and 1936, is being replaced because engineers have said it could fail during an earthquake. Councilmembers Tim Burgess, Tom Rasmussen and Jean Godden on Friday called the project critical and said it must move forward.

“We are deeply disappointed by the news today … that this project will run significantly over the budget presented to the Council and to the voters,” they added.

The Seattle Department of Transportation (SDOT) is overseeing construction of the new seawall between Washington and Pine streets. That work is expected to be completed next year, on schedule, a spokesman said.

But its price tag has increased from $330.8 million, an estimate made in 2013, to $371.8 million, the spokesman said.

An additional section, between Pine and Virginia streets, is not yet under construction. But officials already are increasing their cost estimate for that work from $8.4 million to $38.4 million. They hope to complete the second section in 2017.

Work on part of the first section, between Pike and Pine streets, was initially scheduled to begin this fall. It will now instead begin in fall 2016, in conjunction with construction of the second section, officials said.

The project’s cost was estimated in 2012 to be $300 million but had increased to at least $330 million by the time Murray took office in 2014. In an interview with The Seattle Times in February, the mayor touted the project as on budget and schedule.

Murray had to change his tune Friday but cast blame on the city’s contract for the seawall project, which was signed under his predecessor, then-Mayor Mike McGinn.

“This is the largest and most complicated public-works project the city of Seattle has undertaken in recent history,” he said. “In November 2013, the city agreed to a contract that placed significant cost risks on the city. That was unfortunate, but knowing that, the city has an obligation to watch our costs diligently and be transparent when early estimates are proven wrong.”

Timing of announcement

SDOT knew as early as June that the seawall budget would need to increase because more water and soil than anticipated were being dislodged from the ground by injected grout, said Director Scott Kubly.

Eugene Wasserman, spokesman for the campaign opposing Murray’s proposed $930 million transportation levy, which the council voted in June to put on the Nov. 3 ballot, said the public should have been told earlier about the seawall cost increase.

“I think they deliberately withheld the information,” Wasserman said. “The council would not have approved a levy with that size had the public known about this.”

Christian Sinderman, consultant for the campaign for the Move Seattle levy, said other transportation projects aren’t directly related to the seawall project.

Rasmussen, who chairs the council’s transportation committee, said it might have looked at the levy differently had it known about the state of the seawall project.

“I had no idea that a cost of this magnitude was anticipated,” he said. “We certainly would have taken it into consideration.”

Kubly said officials waited to publicize the cost increase until Friday because “we wanted to take time to verify that the trend we were seeing was going to hold.”

“(The notification) was not as quick as people would like but it was as quick as we could do responsibly,” he said.

Murray is ordering an outside review of the seawall project’s budget and operation to “validate our new cost estimates and advise the city on how to proceed.”

Burgess, Rasmussen and Godden said the independent audit should cover the entire scope of the project and be fully released to the public.

Besides more water and soil than expected being displaced by ground-stabilizing jet grout, the budget increase is mostly due to challenges related to water management, scheduling, traffic control and temporary closures of waterfront businesses, Kubly said.

The project’s initial estimate assumed workers would use a process at the site called dewatering. But early this year, officials decided to instead use a more expensive process to protect against delays and against the Alaskan Way Viaduct sinking, Kubly said. They chose to freeze soil at the edge of the site to keep water out.

The Elliott Bay Seawall extends all the way to Broad Street but its replacement between Virginia and Broad streets hasn’t yet been funded.

Marshall Foster, director of the Seattle Office of the Waterfront, said construction of the planned waterfront park shouldn’t be delayed because it can’t begin until the state’s troubled viaduct-replacement tunnel project is completed and the viaduct is removed. That won’t happen until 2019 or later.