Academic Core project delayed
November 5, 2015
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Ohlone’s Academic Core Project, the reconstruction of the heart of the school, has been delayed by an estimated seven months.
The Academic Core, funded by Ohlone’s 2010 Measure G bond, will cost $130 million.
Before the setback, the construction was expected to be completed by July 2018. Now the center of the campus is expected to be available as soon as Spring 2019 or as late as Summer or Fall 2019.
The delay is indirectly due to the California Supreme Court’s refusal to hear an appeal to an appellate court’s decision in the Davis vs. Fresno Unified School District case. The ruling called into question Fresno’s practice of using a lease-leaseback transaction to build a new elementary school. Ohlone officials had planned to use the lease-leaseback process for the Academic Core construction.
There is now some question as to whether or not a lease-leaseback delivery is a “genuine lease,” according to David Casnocha, Ohlone’s bond counsel.
Many K-12 and community college school districts have used the lease-leaseback delivery for significant construction projects, because it allows cash-strapped schools to select specific consultants and pay them in increments.
Typically, Casnocha said, “public facility contracts should be competitively bid.” Critics say the lease-leaseback practice was an opportunity for school districts to circumvent that.
However, after the recent ruling, that may be changing.
School districts have been advised either to put their lease-leaseback projects on hold or to proceed with a different delivery method.
In September, Casnocha warned the Ohlone Board of Trustees that the Academic Core Project “is a big project to go into a delivery method that has some weakness.” Ohlone has decided to abandon the more efficient lease-leaseback route for the safer, more traditional design/bid/build delivery type. It is expected that leaseleaseback delivery projects will face scrutiny and possible lawsuits after the Davis vs. Fresno Unified School District case. Therefore, Ohlone is putting the Academic Core Project back out to be competitively bid on, and that is the cause for the delay.
In addition to delays, Joel Heyne, project executive with Gilbane Building Company, warned trustees last month that the traditional delivery comes with “certain impacts we were hoping to avoid,” which he broke down into “schedule, cost and quality concerns.”
Neighboring community colleges such as Foothill, De Anza and San José/Evergreen also have abandoned their lease-leaseback programs.