NEW METRO’s downtown station procurement fiasco: Who dropped the ball?

Last week, word came from the NEW METRO that a rather OLD METRO-like failure with a capital project had occurred.

The Chronicle‘s Dug Begley did not put it quite that way, of course, as that’s not the newspaper’s style when it comes to covering local institutions. Rather, the newspaper merely described the procurement breakdown, without showing much curiosity as to blame:

Metro officials on Thursday scaled back plans for an iconic downtown Houston transit hub where three rail lines will cross after board members grew frustrated with what they called inexcusable delays and cost overruns.

[snip]

Metro officials solicited teams to propose iconic designs and assembled a jury to choose a preferred plan. The panel made its recommendation on schedule in February 2012, but Metro did not ratify the winner until September 2013, 18 months later than planned.

Interim CEO Tom Lambert said officials still were piecing together exactly how the station planning got off course. By the time officials started assessing the cost overruns and timing, Lambert said, they found themselves in a predicament.

“There was not enough time,” he said. “We cannot have a station without any cover.”

METRO estimated the chosen design would cost over $2 million, with the Downtown Management District pledging some $600,000 towards the cost. The so-called “bare-bones” design will cost much less, but the management district will not kick in any money towards that cost. Both projects far exceed what METRO had budgeted towards the project.

Swamplot starts to work backwards, ask questions

Following Begley’s roundup of METRO quotes, real-estate blog Swamplot began to fill in some more details of METRO’s latest procurement failure:

According to Dug Begley’s report in today’s Chronicle, though the jury selected the firm’s design in February, Metro never got around to ratifying it until 19 months later. But even then, Metro made no announcement of the firm’s selection. “The whole thing went dark afterwards and no one learned who won or what was happening,” a design professional familiar with the early part of the process reported last month. That’s when the first word came to most other interested parties that Metro was considering other plans. Snøhetta, alarmed that the project could end up going down the drain, encouraged supporters of the project to press Metro committee members not to can it.

The problem, of course, was money. Begley reports estimates for Snøhetta’s selected design came in at $2.164 million, $600K of which would have been footed by the Downtown Management District. But Metro had only budgeted “between $600,000 and $1.2 million for the canopy, not including some electrical components and signs,” reports Begley. “The budget failed to account for those elements.”

Why couldn’t Metro have found other alternatives — a scaled-back design, or additional funding sources — in the year-and-a-half this project was quietly sitting?

That’s a good question, and certainly one of interest to a large segment of Swamplot’s readership (who follow design), but it’s still not quite the right question.

The big, unanswered question remains: WHY was this important capital project quietly sitting for a year and a half, without proper budgeting, public discussion, or apparently anyone to shepherd it through the behemoth known as NEW METRO?

Who is to blame for this failure? And if no single person or group can be named, then what does that say about the current leadership of METRO (or NEW METRO, as they re-christened themselves following the disastrous Frank J. Wilson era)?

Who is to blame for the latest procurement failure?

It’s worth noting that the design competition for METRO’s new signature downtown station was a big deal when it took place. As METRO’s expensive blogger noted at the time, the semi-public portion of the competition drew some 300+ people to “the beautiful Gerald D. Hines building at 811 Main” for presentations from invited architectural firms (in the comments, METRO’s expensive blogger promises a winner would be announced in March 2012; we also learn each of the five firms received $20,000 for their contributions). This was no minor project whose significance might have escaped senior leadership at METRO.

Ultimately, the two chief executives of METRO — hands-on board chairman Gilbert Garcia (an Annise Parker ally, and a rumored future mayoral candidate) and interim CEO Tom Lambert (the former head cop, who has provided much entertainment fodder for the blog over the years) — must take the brunt of the blame for procurement failures when it comes to high-profile projects. But where else to look?

The METRO board’s Capital Programs Committee is definitely worth a look (video here, agenda and other information here).

Even though the ballyhooed “design competition” was well underway before that committee’s meeting in January 2012, the appearance of Bob Eury (head of the Downtown Management District) at that meeting was apparently the first time that any METRO board member was briefed on plans for the signature downtown station.

Eury’s presentation to the committee is available here. The conversation that follows is most interesting.

Christof Spieler is the first board member to speak following Eury’s presentation. Predictably, Spieler is effusive (around 11:48 in the video): “I’m very glad this is going on…. I think the general process has been a very good process.”

Committee chair and board member Burt Ballanfant is somewhat less enthused about the lack of information about the project up to that point (around 11:58): “Just a question… who’s going to be paying, where’s the money coming from to pay for this station and the ultimate winning design work?”

We learn that the Downtown Management District has pledged $600,000 to the project, but staff almost seem evasive in talking about what the cost will be, insisting it can’t really be known until the design is further along (!), leading to Ballanfant’s conclusion in the form of a question: “Bottom line is, METRO is paying for this?”

Pretty much!

Not to worry, though, as board member Christof Spieler reassures (around 13:06) : “But at this point, this is fitting within the previously approved budget for the light rail expansion, and ultimately we’re spending money we would have spent anyway.”

From what had been discussed so far in the meeting, of course, there was NO REASON to draw that conclusion. METRO staff basically had just told the committee that the cost was not yet knowable.

Indeed, (around 13:50) board member Dwight Jefferson wonders aloud if “we” (meaning METRO) would provide the specs to the contestants? METRO staff responds that no, that comes AFTER (!) the design winner is selected, further driving home the point that not only are costs unknowable at this stage, but they are also not even a concern (yet)!

At this point in the discussion (around 16:20), committee chair Ballanfant informs that a fellow METRO board member had called him about the contest, asking if it had been discussed yet in the capital programs committee. Nope! Ballanfant continues (around 16:40): “It really raises a question of, somehow our process as a board isn’t really working, because the board is being presented frequently with decisions after they have essentially already been made.”

Then-CEO George Greanias chimes in that Ballanfant had raised a valid point, and vows to work to fix any problems in the process.

Happy talk and virtual pats on the back ensue, but then board member Jefferson steers the conversation back to numbers, stressing that he had seen the number of professors involved in the contest (prompting some nervous laughter in the room), and that budgetary constraints needed to be kept in mind.

Much more laughter ensues after an off-camera speaker (it sounds like Greanias) interjects, “You weren’t thinking intermodal terminal or something like that, were you?”

Har har har!

As it turns out, the Intermodal Terminal fiasco DOES come to mind

Under OLD METRO, of course, Frank Wilson’s crew developed elaborate plans to construct a ridiculously expensive, showpiece intermodal “downtown station.”

As Mike Reed reported for the Examiner newspapers in 2011, the NEW METRO leadership appointed by Annise Parker shelved OLD METRO’s grand plans, writing off $168 million in “assets” in the process, including some $41 million for the intermodal terminal alone:

Perhaps coming as something of a surprise, though, was the cost related to design work for the abandoned intermodal terminal project, Burnett Plaza, once planned for north of the UH-Downtown business school — a whopping $41 million to be written off.

Describing the plans for the terminal as “grandiose” and “unachievable,” Greanias said land purchased for the project remained as an asset, valued separately at $21 million.

“I’m not quite sure how it got to this point,” he said of the Burnett plans. “They are lovely drawings.”

How DOES one get to this point?

In the case of NEW METRO’s downtown station procurement fiasco, it seems pretty simple:

1. Let the Downtown Management District set up a design contest for a major METRO capital project without any METRO Board input as to budgets or other specs.
2. Present the contest to the METRO Board as a fait accompli, promise to cover $600,000 in costs, and assure that everything is fine.
3. Have the METRO CEO (Greanias) assure board members Ballantine and Jefferson that their process concerns will be addressed, then drop the ball on addressing them.
4. Have a kiddie-porn watching scandal eventually take out the CEO who promised to improve the process, and replace him with a fellow known for his cluelessness overseeing METRO’s police department.
5. Have all board members on the capital projects committee conveniently forget about an important capital project until a year-and-a-half after a winner should have been announced, and nearly a year after construction should have originally been completed.

There’s plenty of blame to go around here. Board members Ballanfant and Jefferson raised good questions, initially, that apparently did not receive needed followup. Board member Spieler seemed so enamored with the glittery nature of it all that he provided no useful fiscal oversight (to the contrary, he wrongly insisted in 2012 that the project conformed to the budget). CEO Greanias apparently got too distracted to improve communication with the Board on this important capital project (and perhaps others). And nobody else stepped up to shepherd the project — hence the current mess.

In short, NEW METRO ends up looking a lot like OLD METRO in terms of failed leadership, although perhaps one can at least concede they did not waste as much taxpayer money this time around.