Upper Arlington to pay Pizzuti Solutions $2.1M to manage community center construction

Nate Ellis
ThisWeek group
Crews from Complete Clearing Inc. work June 2 to tear down the former Macy's building, which served as the anchor business at Kingsdale Shopping Center from 1970-2015. The site is being razed to make way for a mixed-use development that will include a 95,300-square-foot community center.

The city of Upper Arlington will pay Pizzuti Solutions approximately $2.12 million to serve as an owner's representative for the design and construction of a community center at Kingsdale Shopping Center.  

The firm, a division of the Columbus-based The Pizzuti Companies, will provide a range of services throughout the design and construction phases, including project oversight, schedule and budget management, procurement assistance, design review, construction oversight and closeout assistance. 

Upper Arlington City Council voted 6-0, without comment, to approve the contract with Pizzuti Solutions on May 24.

Councilman John Kulewicz recused himself because he works for a law firm that represents Continental Real Estate Cos., a company that's redeveloping the former Macy's site at Kingsdale where the community center will be built at an estimated cost of $54.2 million.

"(The community center) is the largest and most complex (city-funded) project in the city's history and we want to be sure we have all the expertise we need to ensure it is successful," council President Brendan King said after the vote. "The city has a great staff, but no one in the organization has experience with a project of this magnitude. 

"As is often the case with construction projects of this size, we've hired an owner's representative, Pizzuti Solutions, to protect our interests and help guide the city through this process."  

According to a May 17 staff report to council from City Manager Steve Schoeny and Jeff Anderson, the park development and arts superintendent, Pizzuti Solutions will "operate as the single point of contact" for the city throughout the project.  

The staff report said Pizzuti Solutions “has provided (owner's representative) services for many large-scale, complicated, public-sector projects,"  including several in the city of Columbus, such as the Michael B. Coleman Governmental Center, Linden Park Community Center and park redevelopment and Columbus Metropolitan Libraries projects.  

Emma Speight, the city's community-affairs director, said there are no ties between Pizzuti Solutions and Margie Pizzuti, who co-chaired the city's Community Center Feasibility Task Force. 

The staff report to council said Pizzuti Solutions is one of 11 firms that vied for the  contract. The report said the contract amount is equal to 2.75% of the total, estimated project budget of $70 million, plus a 10% contingency fee that is built in for unforeseen expenses.  

"Since bonds have not been issued for this project at this time, the city will need to transfer the $2,117,500 from the general fund reserves to the infrastructure improvement fund in order to appropriately account for this transaction," the staff report stated. "This is consistent with the financial model developed as part of the Community Center Feasibility Task Force process." 

The city plans to build a 95,300-square-foot facility at Kingsdale after voters on May 4 approved an "advisory question" asking if Upper Arlington should build a new community center.  

Plans for a 7-story community center have included an indoor swimming pool, fitness facilities, three gymnasiums, a walking/running track, senior-center programming space, a child daycare component and a multipurpose event space. The top two floors of the building will be reserved to lease as professional office space.  

Construction is expected to begin in 2022 with the facility opening in 2024. 

The community center is part of a larger redevelopment of the former Macy's site by Continental, which plans to build three 7-story buildings.  

In addition to the community center, Continental's portion of the project is expected to yield 325 one- and two-bedroom apartments, eight townhouses, 142 assisted-living units and 6,000 square feet of ground-floor restaurant space. 

City officials have promised that no income taxes or property taxes will be raised to fund construction of the community center. Schoeny has said the city will issue $55 million in bonds to finance construction. 

He said the bulk of the debt incurred by the project will be paid with about $1.6 million in annual revenues generated for 30 years from tax-increment financing deals with Continental for the Macy's redevelopment, as well as two previously established funds. 

Through those arrangements, which also have been approved by Upper Arlington Schools, developers pay money that otherwise would go to the school district via property taxes. The city can use money from TIF funds for "public infrastructure improvements." 

Schoeny has said other funding sources for the community center will include an estimated $500,000 in annual bed taxes guests pay to stay at two hotels in Upper Arlington, along with $5.42 million that could be raised through naming rights and other donations and an estimated $450,000 in yearly income taxes expected to be generated from the redeveloped site. 

That would leave the city's cash contribution at about $8.8 million, which the task force said could be funded with a portion of Upper Arlington’s "rainy day" fund. 

Another $264,512 could be raised annually, the task force estimated, by leasing office space on the sixth and seventh floors. That money would be above what the task force estimated would be needed to service the construction debt. 

Officials have said that ongoing operating costs for the community center will be financed through membership fees. 

Speight said June 1 the city is "getting ready to" issue requests for qualifications to design the community center "with the goal of bringing a recommendation to council over the summer." 

"A final development plan for the community center building will go before the Board of Zoning and Planning for review and approval prior to the start of construction," she said. "A timeline for this is pending." 

Speight said the city is "continuing discussions with potential tenants for a significant portion" of the office space in the community center building.  

Demolition of what was the blue-brick Macy's building that anchored Kingsdale from 1970 to 2015 started the week of May 17.  

nellis@thisweeknews.com 

@ThisWeekNate