Yet another report on the Rex Hub went to Council this week.
The report showed the building project costs and timelines are projected to blow out further, again.
The project is designed to build council offices, a library, an auditorium and cinema and community spaces at the Rex building on Vincent Street. The building was purchased by Council in 2016 and building work was meant to commence in 2017.
The project came to a halt in 2018 after costs blew out and a planning permit was required. A major review saw costs increase 6 fold and then they blew out again to $7.1 million last year. The project was tendered and Hutchinson Builders were notified to commence in January this year. They notified a dispute about the condition of the site and work has not yet commenced.
The building works are now five months behind the schedule. If the project proceeds at all, the builder says there will be further major delays.
It is now extremely unlikely the building works will be completed before May 2022,
The building works are now 7 times the original budget and they will be more than 4 years late.
After months of negotiation, a number of further problems and changes in the scope of the building have emerged. Council Officers have not yet publicly reported on the cost of these changes. But it is likely the budget for the project will blow out well beyond the $7.1 million budget.
This is the third time there has been a major cost blow out and no work has started.
Additional items of expenditure claimed by the builder include, roof replacement, retanking and resurfacing of the carpark, additional drainage, replacement of building seals, repair of walls and ceilings, upgrade of storm water, demolition and replacement of toilet amenities, sound proofing of offices and auditorium, management of lead paint and replacement of projector room cladding.
How these problems were missed in the two earlier reviews is unclear.
A briefing of Councillors on the project was held on June 7 and a confidential report was prepared for their consideration.
Council and the community is now faced with the option of once again allocating major additional funding for the current project with a further delayed completion date until next year.
If Council baulks at additional costs and delays, it is faced with the prospect of abandoning the current project and either redesigning and retendering the hub proposal at the Rex or selling the site and finding an alternative.
None of these options come close to the commitments in the original proposal made to the Council staff and the community, including library users and the cinema group.
There are a range of financial, contractual, regulatory and legal considerations the Council will need to deal with if it exits the current project.
Local real estate agents suggest it is highly unlikely Council could recoup the costs it has committed to the Rex site. One estimate is that the site could sell for around $4m. The original cost of the Rex was $6.3m and to date approximately $2million has been expended on renovations.
If the project is abandoned, it is not clear that Council could keep the $500,000 grant it has for the library development at the Rex.
Council met in camera after the public session of the Council Meeting June 15 to consider the confidential report but has not yet announced a decision on the project.