Federal building makeover drives up cost of MN's biggest stimulus project

MINNEAPOLIS - The extreme-green makeover of the Bishop Henry Whipple Federal Building is like an ad on late-night TV. You know, those ads in which the seller fills the offer with so many bells and whistles the customer - the taxpayer in this case - orders way more than he needs?

The Whipple project is costing as much as 40 percent more per square foot than a new office building, according to some critics, and we're buying it.

An online General Services Administration video even sounds like a cable spot, pitching the retrofit of 617,000-square-foot 44-year-old federal building.

"President Obama's economic stimulus package saved the day," says the government's announcer. "... Thanks to the Recovery Act, GSA is driving industries that invest in the jobs and the economy of the future."

Taxpayers have forked out $1.4 million for solar panels, $12.3 million for 800 250-foot-deep underground geothermal heat exchangers and up to $24.5 million for temporary space for hundreds of workers in a sparkling new office tower .

But wait. There's more.

The sustainable features include $53,000 for custom-cut Forest Stewardship Council certified veneer cut from dozens of mature ash trees on the property that paid the ultimate price for going green.

"Recycling at its best," according to the vendor's website.

It all adds up to Minnesota's biggest federal stimulus job, a shovel-ready - or not - project for a building with 1,100 federal employees and 39 government agencies. The initial project description in June 2009 estimated the construction cost at $80 million-$100 million, though GSA says $115 million was in the budget.

The usaspending.gov website that tracks federal projects shows more than $176 million in construction allocated to the Whipple project, so far. Throw in $5 million per year to lease office space, millions in relocation, furniture and communications expenses, and the Whipple retrofit appears on track to hit the $200 million. GSA does not include such project-related expenses in construction costs.

So how did it happen? What started as a standard mechanical, electrical and plumbing replacement stimulus project evolved into a full-fledged sustainable building showcase that increased the construction price tag by 67 percent.

"The project was initially a partial renovation, and the scope was modified to include a full building modernization, which changed the construction budget from $115 million to $170 million," Catherine Langel, a GSA public affairs officer, said in an emailed statement.

A Watchdog Minnesota Bureau investigation found the renovation of the Twin Cities federal building ranks as the second most expensive of 45 "High-Performance Green Building Full and Partial Building Modernization Projects." Only the Herbert Hoover Building renovation in Washington, D.C., cost more in the General Services Administration's $3.2 billion American Recovery and Reinvestment Act program.

"This would not be as big a deal if it was an isolated incident, but the Whipple Federal Building is just one of 247 stimulus projects aimed at retrofitting federal buildings," said Peter Nelson, director of public policy at the Center of the American Experiment. "This is exactly the sort of wasteful project that time and again undermines confidence in the federal government."

But GSA officials point to 300 jobs created at the peak of construction and an anticipated on-time completion date in June.

"The major renovations at the building are expected to result in a 45 percent reduction in energy use, creating significant saving for years to come," Langel said.

On its website profile of the Whipple renovation, GSA estimates place the projected energy savings in the 30 percent range. A 2012 GSA report documents a nearly 20 percent reduction in energy use since 2003 and 15 percent decline in water use since 2007 overall by the agency.

Few opportunities to go green appear to have been overlooked, from solar panels designed to generate up to 60 percent of the building's water heating requirements to an 800 geothermal well field - Minnesota's largest - anticipated to provide all the building's heating and cooling requirements. Other "high-performance features" include alternative fuel preferred parking, electric-hybrid refueling stations and carpool-vanpool preferred parking.

Perhaps the extraordinary lengths taken to recycle 70 mature ash trees chain-sawed for the geothermal system best illustrate the project's priority of finding sustainable solutions.

"The project team decided to incorporate some of those trees into the building by reusing them as wood veneer for new interior paneling and doors. Because of a beetle infestation that has resulted in a strict countywide wood quarantine, the harvested logs had to be "boiled" (heated in a huge dumpster to a temperature of 140 degrees for an hour to kill beetles) on site before they could be transported to a veneer mill in Iowa," according to a report by Capitol Markets, a group that tracks government real estate projects.

The ash-bore free wood was incorporated into 900 doors and transoms that contribute to the "goal of achieving a LEED (Leadership in Energy and Environmental Design) Silver rating" from the U.S. Green Building Council for the seven-story building.

Yet critics say there's no way to varnish over the fact it would have been far more economical to build a new structure from scratch.

A local business publication, the Minneapolis-St. Paul Business Journal, estimated the cost of the massive GSA renovation at $317 a square foot, compared to a going rate of $200-225 a square foot for a comparable energy-efficient office building developed in the private sector.

"It has been reported that renovating the Whipple Federal Building will cost over 40 percent more than building new Class-A office space," Nelson said. "When businesses with positive balance sheets would never pay that premium, there is no justification for the debt-burdened feds to pay it."

The updated federal building adds six courtrooms, a detention area with cells and other security features for prisoners in federal custody.

"This modernization makes critical investments to protect the value of this federal property," Langel said.

Project descriptions indicate the Whipple renovation team anticipates qualifying for a silver or gold LEED rating upon completion. An online scorecard maintained by the U.S. Green Building Council gives the project a score of 15 out of 110 possible points toward LEED certification to date. That total should rise when new features such as the 1.28 per gallon flush toilets, one of the "high-performance features" that count toward LEED certification, get figured in. The water-saving latrines easily exceed the U.S. Department of Energy best practices standard of 1.6 gallons per flush. Who says GSA isn't committed to reducing government waste?