Posted: October 26, 2018
Rapid City
Agenda Item Summary

Agenda Item Ref. #: LF103118-16

Agenda Item Title:

Authorize Mayor and Finance Officer to sign First Amendment to the Consulting Agreement with the Tegra Group, Inc. to act as the owner’s representative for the Rushmore Plaza Civic Center Arena Project.

Origination Group:
Legal & Finance Committee
Origination Meeting Date:
10/31/2018
City Council Hearing Date:
11/05/2018
Staff Contact:
Joel Landeen, City Attorney
Agenda Item Summary:
The City and Tegra entered into a Consulting Agreement in January of 2018 for Tegra to act as an owner’s representative for the potential arena project at the Rushmore Plaza Civic Center. Since a final decision had not been made at that time on whether the scope of the project would be a larger rebuild/remodel or a smaller renovation of the existing arena, the contract was divided into two phases. During the first phase Tegra’s responsibilities were helping to develop and coordinate the completion of realistic estimates and options so that elected officials and the public could make an informed decision on which option should be selected and what the overall cost of the projects would be. Tegra performed the Phase I services for a flat fee of $49,500. If the City approved construction of an arena expansion based on Tegra’s Phase I work, the parties contemplated that Tegra would be engaged to represent and advise the City in Phase II, the actual construction of the arena. Tegra has extensive experience representing owners in projects of this magnitude. Tegra has acted as owner’s representative during construction of Target Field, the recent renovation of the Target Center, and has represented Sioux Falls during construction of the Denny Sanford Premier Center and is currently representing them in the new mixed use project downtown. Locally, Tegra was the owner’s representative to Black Hills Energy during construction of its new corporate headquarters. Tegra has expertise and experience in managing construction of a project of this nature and magnitude which exceeds the ability of the City staff. Staff believe that Tegra’s continued involvement in this project will help insure that it is completed within budget and on time.

Funding Source & Fiscal Impact (if applicable):

Funding Cost Center
The total fee for the Phase II services are $2,600,000. This fee is approximately 2% of the project’s total estimated budget of approximately $130,000,000 and is already included in the total project cost. The Vision Account will be the funding source for this contract.

Recommendations:

Origination Recommendation Action:
Approve
Origination Recommendation Notes:
The City and Tegra previously entered into an interim agreement for initial services related to helping understand the scope and feasibility of this project. Now that the citizens have ratified the funding for the entire project, this contract will allow Tegra to continue advising the City and coordinating the designing and construction of the new arena.
City Council Options:
If you approve the agreement, the project will remain on schedule. If you reject the agreement, it is likely work on the project will be delayed which could negatively impact the project’s estimated completion date in 2021.

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