Roger Hickel Contracting has made a claim against the Municipality of Anchorage to collect the money it’s owed for work done on the Tudor Navigation Center. Mayor Dave Bronson’s administration on Friday told the Anchorage Assembly it intends to settle with Hickel Contracting for $2.5 million.
The expense is born from the Bronson administration’s decision to greenlight work on the Navigation Center without the required Assembly approval. As the legislative body, the Assembly controls how the city spends its money.
The administration violated municipal code by having Hickel Contracting begin work on the Tudor and Elmore Navigation Center last fall. In addition to not having Assembly approval, the administration also failed to disclose that the cost estimate for completion of the project had increased by over $3 million.
Since he took office, Bronson has been trying to complete the Navigation Center against the will of the Assembly. His plan was to build a large tension-fabric homeless shelter with social services housed on-site. He took what was initially a $50,000 contract and turned it into nearly $5 million in unapproved work, which the administration later admitted was an error.
After learning of the cost overruns, the Assembly declined to approve the project, essentially killing it. Today, the project amounts to a partially finished concrete pad and the purchased fabric structure, which remains in storage at a cost of $5,000 per month.
This incident was a central piece of former municipal manager Amy Demboski’s demand letter sent to Bronson in January, where she alleged that Bronson knowingly started construction of the Navigation Center without Assembly approval, and “expressed that the M&O Director would ultimately be the one to ‘take the fall’ for the decision.”
In an email sent to Assembly members on Friday, Acting Municipal Manager Kent Kohlhase stated Roger Hickel brought a claim against the municipality to receive payment for work. The administration also said they want to settle that claim on March 24 with a payment of $2,455,351.
Kohlhase wrote that the city should be able to pay the settlement because there was an earlier Assembly resolution to allocate $4.9 million for adult shelter. Municipal code dictates that before that money can be spent, the Assembly has to approve a contract for the work to be done by a named contractor at a specific price. This ensures responsible spending without cost overruns.
The project has continually gone up in estimated cost. In the four months between the approval of the $4.9 million and the construction starting, the estimated cost went up $3 million.
The resolution was also conditional on a good faith effort to use the Golden Lion Hotel as a substance use disorder treatment facility. Kohlhase argues the administration met this obligation by stating it would consider the Golden Lion for a treatment facility on June 1.
About a week after that resolution was passed, Bronson stated in a public meeting that he was selling the Golden Lion and that there were already two bidders for the building. The building was initially purchased to be a treatment facility but has yet to be used for any services.
Any settlement with Hickel Contracting will need to be approved by the Assembly.
