Trustees Bet The Farm On Troubled Library Project. Building Committee Approves
Architects rendering of the proposed renovated Jones Library. Finegold Alexander Architects. Photo: Jones Library
Jones Library News Highlights For The Week Of August 22, 2022
Trustees Pledge $8.6 Million Endowment To Cover Possible $17 Million Budget Gap
The main order of business at the unrecorded August 22 Jones Library Board of Trustees meeting was to vote on a motion made by Board President Austin Sarat and tabled at the prior week’s meeting. The motion was “to enter into a new agreement with the town pledging the value of the endowment to help fund the Jones Library building project.” The purpose of the motion was to define a backstop that would limit the responsibility of the Town for covering escalating construction costs and persuade the Town to assume the risk of moving forward with the project.
The construction project, originally budgeted at $36.3 million, is now estimated to cost between $46.8 million and $53.3 million, representing a budget gap of between $10.5 million and $17 million. The low end of the range is based on a cost estimate provided by Fennessy Consulting who were selected by the project designer, Finegold Alexander Architects (FAA). The high end of the range is based on an estimate by RLB who were independently chosen by the Town.
Ken Guyette of Colliers Project Management presented the group with a cost analysis. He pointed out that Colliers has been paid $66,000 to date and stands to earn an additional $77,000 if the project is continued to the point when bids will go out. FAA has earned $327,000 to date and is projected to be paid another $1,308,000 between now and bid date. In total, continuing to prepare bids for the project is anticipated to cost $1,385,000 in professional fees.
Guyette described the downside of halting the project. An estimated $16.2 – $19.5 million would be required to repair mounting problems with the building such as an aging HVAC system and leaky atrium. Additionally, a $2.7 million grant disbursement received from the Massachusetts Board of Library Commissioners (MBLC) would need to be returned. Omitted from the discussion was the refusal by the Library Capital Campaign to consider raising funds or seeking grants to support the building repair options.
Library Director Sharon Sharry explained that the Capital Campaign is ramping up its fundraising activities to meet the growing budget gap. With project completion now pushed out to 2027, Sharry is confident that the Capital Campaign can increase its contribution from its current $6.6 million obligation to the Town, up to $15 million by project closeout in 2028. This assumes several goals that are not guaranteed to be met, including $2.5 million in the sale of Historic Tax Credits, $1.2 million in new state grants, $2.1 million in federal grants and $1 million per year in community donations through 2026.
Trustee Treasurer Bob Pam presented a spreadsheet model, based on a total project cost of $49.5 million, that revealed a cash flow problem beginning in 2024. Funds from the Town, MBLC and the Capital Campaign would not be sufficient to meet expenses. The deficit rises to $15 million in 2025, before falling to $8.5 million in 2025 and $4.8 million at project completion. The deficit would need to be borne by the Library endowment and the Town.
Guyette described how money could be saved by replacing certain project design features with less expensive alternatives. He proposed a set of possible value management changes that could save $1.6 million. Included in the list were using a less expensive exterior material, eliminating the replacement of window sashes, using acoustic ties in lieu of a compound wood ceiling, metal rather than glass railings, and going with a concrete sidewalk instead of stone and granite pavers.
When the time came to vote, Treasurer Pam stated that he could not support pledging the endowment.
“As the financial officer of the Board I have to say no on this project. The level of risk to both the operations and to the ability to carry it through to the end is greater than I think is appropriate for this board to approve.”
The other five trustees disagreed. In the words of Tamson Ely, “When this project goes through, we’ll have so many more people in there using the library. … I know it’s daunting and it’s scary but I don’t see an option but to go forward,” she said.
The motion passed 5-1. Trustees Sarat, Ely, Alex Lefebvre, Lee Edwards, and Farah Ameen voted in favor with Pam voting against.
Building Committee Endorses Trustee Proposal
The next afternoon the Jones Library Building Committee (JLBC) heard Austin Sarat, who also chairs the JLBC, describe the agenda of the meeting being to “decide what we say to the architect and the Owner’s Project Manager (OPM) so that the architects are ready to enter into design development.”
Finance Director Sean Mangano corrected Sarat. “I think it would be a recommendation to the town manager to tell FAA we would go to the next step. The town manager is the determining body to move from one phase to the next.”
The Committee heard from Ginny Hamilton who disclosed that she has been working since March as the project’s paid Campaign Manager, an employee of the Friends of the Jones Library. She explained that the Friends have been working for five years to put a fundraising infrastructure in place, implementing a database and financial systems and hiring a design service, IdeaCo, to help with branding.
The Campaign is now entering a quiet phase where the goal is to raise at least half of the targeted monies before launching a more active public fundraising phase.
Hamilton continued, “Ideally when you get to the point where construction starts there’s a big public launch where we’re talking to some Amherst-connected celebrities to be part of that, and because once there’s a big hole in the ground in downtown and once construction is happening people pay attention differently.”
She reported that the Capital Campaign is ahead of schedule in reaching its pre-cost-escalation fundraising goal of $6.6 million. Their aim was to raise 50% of the goal by March 2023. Now, in August 2022, they have attained 47% of the initial target, with a $50,000 contribution coming in that day.
“We recognize that this is not enough with the new numbers but it’s making the point regarding our success because this is an indicator of our capacity going forward,” she said.
Mangano raised a concern based on a previous recommendation from the OPM that the project not move forward without a balanced budget. Ken Guyette replied that that advice had come from his Collier’s associate, Craig DiCarlo. Guyette’s view is that, while a balanced budget is generally recommended, “with times being what they are right now and the fluctuations that are happening in the market, and the potential for corrections in the future it’s our recommendation that we continue forward.”
Town representative on the JLBC, Zander Lopez, said that he’d prefer to send no recommendation to the Town Manager, feeling that “this is a conversation about larger town priorities.”
Finance Director Mangano stated that, “Given the magnitude of the decision there’s a level of due diligence that the Town Manager and others need to think through. I do think we need a week or two longer to get our arms around this.”
Director Sharon Sharry challenged the contention that the Committee should be considering broader Town priorities. “I respectfully disagree with Zander. It is our job to look at what is best for the Jones Library Building Project,” she argued.
Ultimately the committee agreed. The JLBC voted 6-1-2 to recommend to Town Manager Paul Bockelman that the project continue. Trustees Sarat and Alex Lefebvre, Library employees Sharry and George Hicks-Richards, Town Councilor Anika Lopes, and Town representative Christine Gray-Mullens voted in favor, Town representative Lopez voted against, and Mangano and Bockelman abstained.
What happens next is not completely clear. Asked by Gray-Mullen if the Town Council needs to become involved, Bockelman replied, “The contracting authority is the Town Manager. As long as it’s within the appropriation [the Council need not become involved], and at this moment that’s where we are.”
This is an extraordinarily apt title for an extraordinarily alarming action. The new motto for the Jones appears to be “If we build it, it will be paid for.” Several points come to mind: 1. A number of years back, trustees began to draw down more of the endowment to cover a shortfall in operating costs. They were warned that this was not sustainable. I believe that the percentage was in the single digits, but do not remember the exact figures; perhaps other Indy readers do. 2. The endowment is not a fixed amount, and is subject to the vagaries of the market. A 2020 Masslive article gave two sobering examples: In February of 2020, the endowment was at $7.9 million; one month later it had plunged to $7.2 million. A similar drop had happened in 2001-2002: From $8.9 million in June of 2001, the endowment had dropped to $7.8 million by June of 2002. In 2022, we are in yet another period of market vagaries; I’m sure Indy readers have seen their own investments take uncomfortable plunges this year. 3. The Jones is a public library that serves the residents of Amherst and of many surrounding towns, but it is not town owned; it is a private entity. While the endowment funds the majority of library operations, the Town of Amherst does contribute a sum of money each year toward the operation of the library. If the endowment is depleted significantly, or if it is spent entirely, where will the new library’s operating funds come from? Will the trustees and library director argue that because the Jones is a public library, for the public’s benefit, that it should now be the Town of Amherst that assumes the burden for these costs? It is perhaps a fair question, but one that should be considered at length before the town is forced into a position of being the only entity that can keep the library from shuttering its magnificent new structure.
Thanks, Jeff, for this indispensable reporting! My apologies to anyone whose eyes glaze over at the legal citations in this comment. Many thanks if you read it anyway.
It is vital to note that the above Schematic Design cost table presented at the Trustees’ unrecorded 22 August meeting includes the eye-opening data that the “Current escalation = approx. 1% per mo.” This startling increase in escalation came from the Town’s independent cost estimator. Assuming that it is correct, a delay of just two month in the Jones Library’s demolition/expansion project would thus increase its “Total Project Cost” by about a staggering “$1,066,000.”
Yet we are hearing nothing about an essential step that could not only delay this project for up to an additional 90 days, or at least yet another $1,500,000 or so in additional costs. Moreover, the Town’s grant contract with the Massachusetts Board of Library Commissioners (MBLC) absolutely requires this step. The regulations governing MBLC construction grants are binding law, and they could not be more clear:
“For construction projects, [the Town of Amherst will] agree to the following assurances set forth in the construction grant agreement ….
that the [Town] will comply with [Mass. General Laws, Chapter] 9, §§ 26 and 27C and 950 [Code of Mass. Regulations] 71:00: ‘Protection of Properties Included in the State Register of Historical [sic] Places’ and any additional Massachusetts Historical Commission legal and regulatory requirements, including that which affords the Massachusetts Historical Commission the opportunity to review and comment as early as possible in the planning stages of the project;….”
As the website of the Massachusetts Historical Commission (MHC) shows, the Jones Library is listed on its State Register of Historic Places. As part of the Central Business District, the Jones is listed also on the National Register of Historic Places. See https://mhc-macris.net/#!/details?mhcid=AMH. Yet the Trustees and Town have evidently still not complied with the Historic Preservation Law.
The MHC is always concerned that any project on a State Register property “eliminate, minimize or mitigate” any “adverse effect on any property listed in the State Register of Historic Places.” See 950 Code of Massachusetts Regulations (CMR) 71:02. What are these “adverse effects”? They “may … include but are not limited to: … the destruction of all or part of a State Register property;….” See 950 CMR 71:05.
As we know, the Library’s demolition/expansion project proposes to gut, i.e., destroy, many of the historic fireplaces, fireplace surrounds, and staircases, as well as much of the carved woodwork and Philippine mahogany paneling of the original 1928 Library. The project also proposes to change the Library’s historic main entrance by, among other things, adding a plexiglas-type canopy over the door. In other words, the MHC’s “review and comment” concerning “adverse effects” on the Jones Library might well result in yet more changes to the present schematic design. These changes in turn will involve those elevated, 1% per month escalation costs, because of the additional time involved, plus additional, unaccounted-for costs for the architects and, possibly, the Owner’s Project Manager.
Please note that this MHC “opportunity to review and comment” is apparently not just a once-over-lightly. In a letter to Amherst Town Manager Paul Bockelman dated 23 December 2016, i.e., going on 6 years ago, the MHC informed him of what it required for the purpose:
“[C]omplete photographic coverage of proposed work locations on the exterior and interior of the library, keyed to sketch maps or floor plans. … [A] detailed project description along with an indication of what exterior and interior sections of the building will be removed and whether they will be stored for future reuse. … [E]xisting and proposed perspective illustrations of the project, keyed to a sketch map.”
No article I have seen has reported that the Trustees and Town have submitted this required data to the MHC. Actually, this MHC letter requests also that the Town submit “a copy of the above requested information” to the Amherst Historical Commission, and a copy to me personally. I am a past Jones Library Trustee President. I have never received this information.
This background sheds an interesting light on a colloquy reported above at the 23 August meeting of the Jones Library Building Committee. Trustee President Austin Sarat wanted the meeting’s agenda to “decide what we say … so that the architects are ready to enter into design development.”
As I understand it, the “design development” phase of a construction project comes only after the project has a final schematic design. This project does not have one. It will furthermore not have a final schematic design until that design accommodates whatever the MHC’s concerns might be about the demolition/expansion’s “adverse effects” on this State Register property.
Perhaps that is why, as reported above, “Finance Director Sean Mangano corrected Sarat. ‘I think it would be a recommendation to the town manager to tell [the architects] we would go to the next step.’ ”
Assuming that this “next step” is submission to the MHC of the required information about Jones Library historical features that are destined for “adverse effects,” the Town Finance Director was right to put in that correction. This is because the Town’s MBLC grant contract has real financial teeth.
“Failure of the [Town] to comply with any of the assurances in the grant contract and agreement constitutes a breach of contract.” Breach of that contract can cost the Town the remainder of the MBLC construction grant, plus requiring return of the $2.7 million that the Town has already received, with interest. See 605 CMR 6.05 (c).
The article further quotes Finance Director Mangano: “The town manager is the determining body to move from one phase to the next.”
If the Town Manager and Trustees have complied with the Massachusetts Historic Preservation Law, but have simply said nothing about it, they owe the Town Council and the Amherst public an explanation. If, however, the Town Manager directs the architects to move to the “next step” of “design development,” without having first submitted the required project data to the MHC, the Town will evidently be in breach of its grant contract. If so, this financial fecklessness could cost the Town dearly.
From the start, this Library demolition/expansion project has been oversized and troubled. Now its costs are ballooning uncontrollably. Is a total of some $50,000,000 the end? Obviously not. And that is evidently without taking into account the Federal Reserve’s recent interest rate increases. I see this as just one more reason for the Trustees and Town to decide now to eat the sunk costs in this project, return the grant money received, and come up with a project that will not jeopardize financing for our new elementary school, new fire station, and new DPW building. They are guaranteed to be fully occupied most or all of the time. An even bigger Jones Library? Not so much.
If I am reading Jeff’s excellent reporting correctly, it appears that our Town Manager has the legal power to approve the next step of the Jones Library demolition/expansion project BEFORE the Town Council votes on adopting a new Memorandum of Understanding to put the entire Jones’ endowment at risk. A new MOU would mean that the Town would have to be willing to borrow the entire amount of the cost escalation before the state reimburses the town in five different stages over the next few years.
If this is a possible order of events, then our town is really in an even more frightening situation. One person should not have the power to make such a huge decision. The Council must call an emergency meeting ASAP.
Ginny Hamilton, the Friends’ paid Capital Campaign Manager, states that fundraising is in the “quiet phase.” After six years of planning? As my father would have said, the Friends’ need to be working like “bats out of hell” to raise money with trumpets blaring. She added that “once there’s a big hole in the ground in downtown and once construction is happening people pay attention differently.”
You bet! Residents will realize that the Jones has been destroyed unnecessarily, and there’s a huge hole in the Town’s budget in addition to the library (not town) property. Remember, folks, 40% of the current facility will be razed because the Trustees did not want to adapt the entire 1993 addition before adding an expansion. One reason the escalation in costs is so high is because there will be over 30,000 sq. ft. of new construction instead of just 13,000.
Tremendous thanks to you all for giving us a clear view of the ongoing disturbing drama at the Jones.
I have some questions for Sarah McKee: Sarah, is anyone on the MHC watching and waiting for the mandatory information you describe? If it is not presented to them for review, but the project goes forward, will a strong MHC rise up and call a halt? Or is the MHC toothless, and will look the other way until the destruction is done, then ultimately forgive with a little tsk tsk? Can the Town Manager and the Trustees be compelled to answer the questions you raise in the next-to-last paragraph of your statement, perhaps via a citizen petition letter, so that we taxpayers can know if they are attending to this, or ignoring it?