Walton Construction has been hired to finish the West Edge project, although it will be several weeks before work resumes on the star-crossed development near the Country Club Plaza. Robert Bernstein, the advertising magnate developing the $130 million project, was relieved Tuesday to begin moving beyond the controversies that have dogged his showcase project, which peaked several weeks ago when J.E. Dunn Construction Co. either quit or was fired, depending on the point of view.
“We are delighted to be moving ahead on this project with an enthusiastic local company, one who bid on it originally,” Bernstein said. “We look forward to working with the Walton team to help us finish the West Edge on a timely basis.”
Walton was edged out by J.E. Dunn when the project was bid in 2005. The development, which includes a 205,000-square-foot office building with a dramatic, multistory atrium and a 131-room boutique hotel, was designed by renowned architect Moshe Safdie, who also is the architect of the Kauffman Center for the Performing Arts. J.E. Dunn began construction in December 2005, but in June 2007 the firm filed a lawsuit against Trilogy Development Co., the subsidiary established by Bernstein, saying changes to the design had driven up costs by $22 million. Trilogy countered that the changes were minor and demanded the contractor complete the job for the agreed-upon price.
The dispute eventually went to court-supervised arbitration, where it remains. In the meantime, while construction continued, the relationship between developer and contractor continued to deteriorate until both parted ways at the beginning of October. J.E. Dunn pulled its crews, leaving the project at 48th Street and Belleview Avenue silent. Bernstein said Walton was one of several firms interviewed to complete the job. He declined to identify the others, but officials at McCownGordon Construction had said they were going to pursue the project. Dennis Thompson, president of Walton’s Kansas City division, said the firm’s first task is to determine what work remains to be done, estimate the cost and persuade subcontractors to return.
“It’s obviously more difficult when you’re assuming someone else’s work,” Thompson said. “We need to confirm costs and the quality of work that’s been completed, and then come up with a plan to finalize the cost and place an end date to the schedule.” Bernstein said the project, which had been scheduled to open last April, should be completed no later than the second half of next year. He remains on good terms with his lender on the project, BB Syndication Services Inc. of Madison, Wis.
“They have been wonderful through all of this and very supportive,” he said. “Our financial package is still in place.” Yet to be determined is whether additional financing will be required to cover the cost increases alleged by J.E. Dunn or compensate for the delays in the development.
“Until we know a final number, I can’t tell you if we need additional financing or not,” Bernstein said. “Right now, we’re fine.”
Another problem confronting Walton is the West Edge’s failure to achieve affirmative action goals established by the city when the project received $31.6 million in tax-increment financing assistance. The Kansas City TIF Commission agreed with city officials earlier this month that the developer had not made a good-faith effort to reach its goal for minority contractor hiring. The commission delayed considering penalties to give Trilogy Development time to hire a new contractor and determine whether additional minority contractors could be hired for the job.
“The analysis of the TIF goals is going to be determined when we meet with the subcontractors,” Thompson said. “We’ll have to determine opportunities for minority business enterprises to complete the remaining work.” The West Edge will be home to Bernstein-Rein advertising and also the Beauty Brands chain of retail beauty products, salons and spas. Besides the hotel, the project will include a restaurant, shops and the Advertising Icon Museum, which will house Bernstein’s collection of enduring advertising characters and concepts.
“I’m still excited about the project itself,” Bernstein said. “It’s a fabulous building that will be an iconic legacy building in Kansas City.” He said he understood the delays have been a problem for the neighborhood as well as motorists who have had to contend with closed lanes next to the development for almost three years.
“Our desire and contract called for it to be done in April 2008,” he said. “We’re as impatient as anybody to get those lanes reopened.”
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