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Space of Waste

An office building project for city sewer engineers triples in cost to $11.4 million—at the worst possible time.

In December 2011, a coalition of angry water and sewer ratepayers sued the city of Portland. Their basic allegation: The city had squandered $127 million in ratepayers' money on questionable projects.

That should have been a warning to City Council members to watch their spending on the next ratepayer-financed idea that came along.

It wasn't. A month later, in January 2012, the City Council without debate voted to increase spending on a Bureau of Environmental Services office project on its way to $11.4 million in costs—triple its original price tag.

Records obtained by WW show how the city turned what was supposed to be a utilitarian office building into a gleaming environmental showcase and the "new face" of the Portland's sewage treatment plant. The city's own contractors called the building, which opened last month, a "poster-child facility" for wastewater engineers in North Portland.

There's no suggestion the spending was improper, but the records show the City Council failed to keep the project under control. Five times, between 2010 and 2012, the council agreed to keep spending more money on the project, and did so without debate.

"I totally take ownership that this project got way beyond its ways and means," says City Commissioner Dan Saltzman, who then oversaw the Bureau of Environmental Services. "We did push back on the contracts, but we didn't push back hard enough. I kept seeing the scope change quite a bit. That's the problem. It's never a good thing to do."

Final all-in construction costs make the Columbia Boulevard Wastewater Treatment Plant support facility one of the city's most expensive office spaces.

Bureau of Environmental Services director Dean Marriott tells WW the building's construction costs were $5.5 million, which translates to $478 per square foot. If true, that makes the sewer engineers' offices more expensive than the proposed downtown Sustainability Center promoted in 2009 by then-Mayor Sam Adams. That building died on the drawing board because its estimated cost—$462 a square foot—would likely have made it the city's most expensive building.

But records obtained by WW under the Oregon Public Records Law show Marriott is leaving out millions of dollars in costs, including planning, design and landscaping expenses typically included in the price of construction.

Based on the records, the project's true per-square-foot costs would range between $799 and $956.

Marriott says the project's purpose expanded, from an office building to a welcome center that could provide security for the sewer treatment plant.

"We're accomplishing multiple purposes with this development, which seems to be beyond some people's ability to understand," Marriott says. "This is what you want from your government. We adapted. We solved a lot of problems at that campus."

On May 20, Portland voters will decide whether to strip control of the city's water and sewer bureaus and give control of them to a seven-person, independently elected board. The ballot measure has been pushed by large corporate water users that have pointed to what they say are wasteful and unnecessary projects funded with ratepayer money ("Talkin' Bull," WW, April 23, 2014).

Those projects include an environmental display home called the "Water House," and a $1.1 million visitors' center and caretaker's house at a new underground reservoir on Powell Butte ("Million-Dollar Water Park," WW, Oct. 23, 2013).

But the $11.4 million office project for sewer engineers has largely gone without public scrutiny.

KOIN-TV first reported the building's increased price tag in March, but documents released to WW under the Oregon Public Records Law explain for the first time how costs spiraled out of control.

The Bureau of Environmental Services runs the Columbia Boulevard Wastewater Treatment plant at 5001 N Columbia Blvd., along the Columbia Slough about two miles west of Interstate 5. 

It's where the city flushes its wastes, pumping in 70 million gallons (when it's not raining) to 450 million gallons (when it does rain) of sewage and stormwater a day.

In 2009, the bureau proposed a $3.2 million office building to replace modular buildings where 38 BES employees, including engineers, worked. But records show the BES had underestimated the building's basic costs. The price went up to $4.6 million by the time the City Council voted on the design contract in June 2010.

The bureau awarded the design contract for the office building to Skylab Architecture, known for such projects as the log-cabin nightclub Doug Fir Lounge.

Skylab designed an 11,500-square-foot angular steel and glass structure that appears to rise out of wetland grasses that slope down the building's sides and roof. 

The building was designed to show off the environmental work the BES does in other parts of the city, from bioswales to ecoroofs. The design called for native plants to cover 80 percent of the roof, a wooden deck with a gas barbecue overlooking an existing pond, and vented windows at the top of the roof to give workers fresh air. 

Even the doors to the restrooms reflect the LEED Gold-certified building's environmental mission: The frosted glass shows silhouettes of men and women, drawn out of wetland creatures like snakes, salmon and heron.

"It will be the poster-child facility for the BES," architects wrote, "representing the function of the [wastewater plant] and providing an interactive, educational depiction of current programs of the BES."

In February 2012, Saltzman put the greatly expanded $7.9 million project on the council's consent agenda, where items considered routine are passed without public discussion. The council, again without comment, approved it.

Over the next year, the council wordlessly approved more design changes—and cost increases—until the project hit $10.2 million.

But BES wasn't done: Without needing the City Council's approval, the bureau signed off on 85 change orders totalling $1 million sought by the project's contractors. 

Marriott says the $3.7 million cost of designing and managing the project—and the $2.2 million spent on improving the surrounding site—should not count as part of the building's cost per square foot.

Will Macht, a real-estate developer and professor at Portland State University, says such related costs should be included. "Without looking at the project in detail, certainly the number is extraordinarily high," he says. "It would invite further questions, attention and scrutiny."

On April 25, after WW started asking questions about the project, City Commissioner Nick Fish, who now oversees the BES, asked  City Auditor LaVonne Griffin-Valade to investigate it in a formal audit.

"A lot of things land on our consent agenda," Fish says. "A lot of projects grow in cost. The question is, was there enough transparency?”