The estimated cost of replacing the General Assembly Building as part of an overhaul of the Capitol Square complex has risen by at least $24 million, largely because of a nearly two-year delay due to a political confrontation between then-Gov. Terry McAuliffe and General Assembly Republicans over expanding Medicaid.

The extent of the projected cost overrun is not clear. The state has yet to sign construction contracts for the new assembly building, as well as renovations of Old City Hall that would be more expensive than estimated and construction of a parking garage that would be connected to the legislature’s new home by a tunnel beneath North Ninth Street.

However, key legislators overseeing the Capitol complex project say they reduced the scope of the new General Assembly Building — decreasing the square footage and excluding two high-profile legislative agencies — to save money.

“Some changes had to be made to bring the cost back to a little closer in line,” said Sen. Frank Ruff, R-Mecklenburg, a member of the Senate Finance subcommittee on capital outlay and a joint rules subcommittee that is supervising the project.

House Appropriations Chairman Chris Jones, R-Suffolk, also a member of the rules panel, confirmed that the subcommittee made changes that reduced the size of the new building, while leaving the Division of Capitol Police and Joint Legislative Audit and Review Commission off the new floor plan.

“The estimate came back higher than anticipated and that, coupled with the additional cost due to delay, required adjustments to the scope of the project,” Jones said Friday.

McAuliffe’s delay

McAuliffe delayed the General Assembly Building replacement by almost two years because of the legislature’s continued refusal to expand Virginia’s Medicaid program under the Affordable Care Act, which he said should be a higher state priority than an expensive new home for legislators.

The project was initially proposed in 2014. The governor didn’t allow executive branch agencies to work on the project for nine months and then limited their authority to procuring preliminary engineering and design.

The deal finally was sealed in early 2016 after a showdown over a proposed $2.1 billion bond package that the House of Delegates threatened to cancel entirely if the Capitol complex overhaul didn’t move forward.

The two-year delay resulted in higher estimated construction costs, which escalated about 4 percent a year, or $24 million, said Joe Damico, director of the Virginia Department of General Services, which is responsible for state construction projects.

“Construction costs escalated more this year,” Damico said in an interview. “Steel prices are going up.”

Ruff said the pool of skilled construction labor also has shrunk since the recession hit in 2008, making it harder to speed up the project to outpace inflation. “There are not enough support contractors,” he said.

Old City Hall

Other factors contributing to unspecified cost increases for the total Capitol complex project include a more expensive renovation than expected at Old City Hall, a late 19th-century Gothic landmark that has sustained extensive water damage from a leaky skylight and internal drainage pipes.

“I realized we didn’t have enough money to complete the renovation project,” Damico said. “We’re not going in there and doing a hack job on a National Historic Landmark.”

Similarly, the widely praised decision to preserve the 1912 facade of the old General Assembly Building facing the Capitol added time and cost to the project, requiring the six-story wall to be shored in places while heavy machinery painstakingly demolishes the buildings around it.

Damico said he could not yet quantify the additional cost for preserving the facade, but he said, “It was the right choice for the building. It was the right choice for Richmond, and it was the right choice for Capitol Square.”

Targeted price unclear

The difficulty of establishing firm cost estimates for each part of the project arises from the state’s policy, adopted about eight years ago, to finance capital projects through pools so that potential bidders don’t know the targeted price.

“We stopped putting out what we were willing to pay for a building,” Appropriations Director Robert Vaughn said. “Everybody knew what we were willing to spend.”

The proposed House budget includes an additional $11.8 million for “Capitol Complex Infrastructure and Security.” Both budget proposals include a provision for “seat of government swing space and repairs.” The Pocahontas Building would temporarily house the legislature and then the Virginia Supreme Court while its century-old building on Ninth Street is renovated.

The state hasn’t awarded construction contracts for the various pieces of the Capitol complex project, but has completed deals to demolish the General Assembly Building and design a new building, which the state Art and Architectural Review Board approved last fall with high praise for its design.

The new GAB

The design the board approved shows a building with 14 stories above ground and a basement. On Friday, Dena Potter, a spokeswoman for the Department of General Services, said that configuration has not changed since the state moved from the schematic to preliminary design phase.

“As with any construction project, there were discussions about the number of floors and programming early in the design process,” Potter said.

The costs for “the architectural design and demolition contracts were what we expected,” she added.

The building — actually four different structures melded together in 1976 — was considered a health hazard for employees and visitors because of crumbling asbestos around pipes in ceilings, cracked masonry, and outmoded electrical and other operating systems. Damico said crews completed the removal of asbestos and other hazardous materials in January so it could move into the demolition phase.

Demolition began March 31 and will continue through June, as crews pile the debris into the building’s interior. The next phase will be to remove the debris and transport it for disposal, allowing crews to begin digging into the site at Ninth and East Broad to prepare it for shoring the new building’s foundation.

“By October, the situation should be in a position that it’s ready to be built,” Damico said.

Pocahontas Building

The General Assembly held its last session in the old building last year and then moved into the Pocahontas Building on Bank Street south of Capitol Square. The building houses legislative offices, committee rooms and most support agencies, except for JLARC, which is leasing space in the SunTrust building, and Capitol Police, which is housed in the Washington Building on Bank Street.

The legislature held its first session in the new quarters this year and will stay there until after the scheduled session in 2021. Currently, the state controls a portion of Bank Street to allow pedestrians to cross safely between the Pocahontas Building and the Capitol, but the agreement reached with the city last year requires the removal of traffic barriers and restrictions between sessions.

The proposed House budget includes language that would leave the traffic control and pedestrian safety measures in place until after the 2021 General Assembly session. From a cost perspective, “it makes sense to leave it in place,” Damico said, “I think from a safety standpoint, too.”

“I have not heard from anybody complaining about what we’ve done there,” he said.

Richmond officials are waiting for the assembly to act on the budget before engaging in detailed discussions with the state, but Bob Steidel, deputy chief administrative officer for operations, said the city is working closely with Capitol Police to ensure public safety on Bank Street.

“If the decision is to leave it standing all year long, we’ll make it work,” Steidel said of the traffic barriers and checkpoints on the street.

Ninth Street tunnel

City and state officials already are talking about the steps necessary to build a tunnel under Ninth Street between the new assembly building and a 10,000-square-foot building for parking and state offices.

“If we do a tunnel under Ninth Street, we need to understand the utilities that run under the street,” Damico said.

The state is trying to determine what government tenants would occupy Old City Hall in order to plan for them, complete design of the project by the end of this year and begin the two-year renovation next year.

“They’re all coming on line together,” Damico said of the 2021 target for completion.

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