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Bids to widen Pasco's State Road 54 cost less than predicted

WESLEY CHAPEL — Thank the dismal economy for one price tag on the State Road 54 widening project: Construction costs for the latest leg could be up to $17 million below what county officials had predicted.

Eight bids for the work came in between $22.1 million and $29.8 million — all well below the county's estimated $39 million price tag, said Deborah Bolduc, the county's engineering services program administrator.

But the economy didn't help much with another, much higher cost: acquiring the land to do the work.

When the final tally comes in, Pasco County expects to have spent up to $70 million acquiring the 116 properties needed to turn almost 3 miles of State Road 54 between Interstate 75 and Curley Road into a six-lane highway.

The money for the project comes from the county's share of gas tax revenue and local transportation impact fees. The state Department of Transportation is also kicking in $13 million.

No big surprise that construction costs were down for the congested corridor's long-anticipated project: Contractors are hungry for work.

"We saw this last year," said Bolduc. "It's due to the economy, and their prices are very competitive."

So why didn't the right-of-way costs reflect the county's sharp drop in real estate values?

"People don't understand that it's not that we're just paying for the property," said David Edwards, the county's real estate manager.

That $70 million figure includes business damages, attorney and expert fees (for both the county and the property owners), relocation costs as well as mediation and trial costs.

"They had a lot to deal with," said Bill McTeer, a right-of-way expert who works for the Department of Transportation's Tampa district office. "Everything was pretty much close to the road."

Out of the 116 parcels, the county held traditional closings on only 16, which were purchased after negotiations.

The rest were acquired through eminent domain lawsuits. As part of those proceedings, property owners must be fully compensated for their attorney and expert fees.

The high number of court cases didn't surprise Edwards.

Most of the stretch of State Road 54 to be widened was developed with commercial properties, whose values didn't drop as quickly as residential values.

And commercial property owners, who have large investments, are generally less likely to settle, he said.

In addition, the county has to pay to restore a number of the properties. The properties included three gas stations and a convenience store, for instance, so the county was responsible for the removal of fuel tanks, Edwards said.

So far, the breakdown of what's been spent, according to county officials: $30 million for properties taken through eminent domain; $16 million in negotiated settlements; nearly $4 million in business damages; $7.5 million in attorney and expert fees and $200,000 in relocation costs.

The price tag on business damages is expected to go up, Edwards said. Mediation and trial costs have not yet been accounted for.

Years ago, when the project first came on the radar, officials estimated the right-of-way costs for the job to be around $30 million, said County Commissioner Ted Schrader.

Edwards said that when he came on board three years ago, he estimated $60 million for the right-of-way budget. That number has since been revised to $70 million.

The acquisition costs "obviously were way above what Pasco County intended," Schrader said.

McTeer, the state transportation official, said there is no typical ratio between construction costs and land acquisition costs for a road project.

"Each project stands on its own for right of way," he said.

McTeer said today's market throws a number of curveballs when it comes to acquiring land for road projects. Say a house carries a $300,000 mortgage but is now worth about $160,000.

"Who pays the extra $140,000 to the mortgage company?" he asked.

Those kinds of negotiations can get complicated, he said, and "we're trying to stay out of residential properties for that reason."

Commissioners will make a decision on the State Road 54 bids in the next month. Construction could take more than two years, though the contractors submitted additional figures if officials want to expedite the work.

Schrader said that for constituents in his and commission Chairwoman Pat Mulieri's districts, easing congestion along that section of State Road 54 is long overdue.

"This is a No. 1 priority in our respective districts," Schrader said. "We have continued to press staff to get this one done as quickly as we can.

Jodie Tillman can be reached at jtillman@sptimes.com or (727) 869-6247.

By the numbers

$22.1M Lowest construction bid to widen State Road 54

$29.8M Highest construction bid to widen State Road 54

$70M Estimated right-of-way costs for the road project

3 Miles of State Road 54 being widened

Source: Pasco County government

Bids to widen Pasco's State Road 54 cost less than predicted 01/07/10 [Last modified: Thursday, January 7, 2010 8:36pm]

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