North Fire Station renovation zooms to $15 million

The cost of the total renovation of the historic North Fire Station has rocketed upward to about $15 million – nearly triple the project’s original budget.

Town Manager Kirk Blouin said Tuesday that soaring construction prices and the deteriorated condition of the station are responsible for the additional cost. The
building is nearly 100 years old and has deteriorated over the years from water intrusion and mold.

Work began in August 2022 on the landmarked fire station at 300 N. County Road. The three-story building has been gutted with only the exterior walls remaining. It remains on track for completion by the fall of 2024, the town said in March.

Blouin said renovating a century-old station is altogether different from building a new one from the ground up. In the latter case, the costs are far more predictable.

“They didn’t know what all the issues would be until they got into the walls,” he said. “When they did the demolition on a building that is 100 years old, they [found] structural issues. We need to replace the roof, the foundation, new pilings. They will try to keep what they can. But the walls are pretty much all gone.”

The town has taken a pay-as-you-go approach, drawing on reserve funds to meet the costs. Blouin said the town expected the total cost to total around $10 million. But a “guaranteed maximum price” from the contractor, Hedrick Brothers Construction, exceeded $11 million, the town recently learned. The town has already spent another $3 million on the project, bringing the total to nearly $15 million.

“The demand for construction work has been through the roof, particularly in this market,” Blouin said. “They pretty much name their price.”

The top-to-bottom renovation of the station was originally pegged at $5.5 million. The Town Council approved $6 million for the work in 2021 and added $2 million last year, but officials said at the time that the cost could exceed the $8 million budget.

Other budget pressures in the mix

The North Fire Station was not on the agenda at Tuesday’s council meeting. Council President Margaret Zeidman raised the subject during a discussion of a $7 million shortfall in funding needed to fully renovate Phipps Ocean Park.

The Palm Beach Preservation Foundation, which is spearheading a fundraising campaign to finance the re-do of the park, said it has raised $23 million for construction but needs $30 million. The foundation has cut about $12 million from the design after a construction estimate in February pegged the project at $42 million, foundation President Amanda Skier said.

Skier said the foundation was not asking the town for the $7 million but was inquiring if the council would shoulder some infrastructure costs to help close the funding gap. Council members suggested the foundation work with town staff to continue to look for ways to reduce the costs before returning to the council in September with a specific funding request.

The council has already committed to maintain and staff the park once the project is completed. That is estimated to cost $660,000 annually, partially offset by an anticipated $378,000 in increased parking revenue. The town is also spending $229,000 to remove invasive plants.

The town owns the 20-acre, oceanfront park, which was donated to it by the Phipps family in 1948.

Zeidman said the town remains committed to the project. “We own the park, so we do have skin in the game.”

But she said the council must consider the foundation’s funding request along with other budgetary considerations for fiscal 2023-24, which begins Oct. 1. She said the town faces other fiscal headwinds, including the fire station cost overrun, general inflation, and the cost of rebuilding the Midtown Beach seawall.

“We have to set our priorities,” Zeidman said.

Blouin said the north fire station cost overrun would come before the council next month. The council has scheduled a special meeting on July 13, at 9:30 a.m. in Town Hall, to focus on the budget.

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