The Riverfront Development Corporation says the cost of former mayor Willie Herenton's signature riverfront project has increased by $8.9 million and the completion date is now the summer of 2011.
The cost overrun was not unexpected. When BSL came before the Memphis City Council in May, RDC director Benny Lendermon insisted the project cost, originally pegged at $27.4 million, was $31 million even though various documents from City Hall showed the cost was in excess of $33 million. When Councilman Kemp Conrad asked about "the delta" between the numbers, Lendermon said reports about the higher number were inaccurate.
It is now clear that they were, but on the low side, not the high side. The RDC now says the "current construction estimate" is $35 million.
The RDC reported the bad news last week in the fourth paragraph of a story on its website headlined "Beale Street Landing answers call for reunion of Memphis and the Mississippi."
"RDC has been especially prudent in managing its operating funds and careful in value-engineering various aspects of the project to reduce costs. Increases are due to a combination of delays, redesigns related to historical preservation issues, and cost escalation related to schedule delays. In addition, unexpected Congressional holdbacks have meant that federal funds designated for the project have been reduced by more than $1.4 million below what was anticipated and budgeted. Due to this nearly three-year delay, the RDC expects about $9 million in combined cost increases and funding decreases."
"Roughly $7 million of the cost increase is directly related to construction inflation, which was exacerbated as a result of Hurricane Katrina."
The federal funds "holdbacks" mean Memphis taxpayers will be asked to pay the difference as well as the cost increase. The project is underway at the north end of Tom Lee Park.