In 2013, something remarkable happened that seemingly should be routine — a big public project was completed on time and under budget.
San Diego International Airport’s new Terminal 2 — then called the Green Build — was immediately lauded for its spaciousness, access, amenities and environmentally-conscious design.
The airport was awarded a Leadership in Energy and Environmental Design (LEED) Platinum certification, becoming the first commercial airport terminal in the world to achieve that honor.
There was another important distinction. The project beat its $1 billion budget and opened for business in August of that year, as scheduled. Planning and project management had a lot to do with that. But perhaps nothing did more on the cost end than good timing with the bond market.
Regardless, the success of that massive project — celebrating its 11th anniversary next month — stands in contrast to smaller but notable local efforts that have headed down the familiar path of significant cost overruns.
San Diego projects have plenty of high-profile company, from the runaway costs of California’s high-speed rail to Boston’s “Big Dig” transportation undergrounding project.
The Pershing Drive Bikeway through Balboa Park opened with considerable fanfare on Saturday. News stories detailed how the bike lane, which is separated from automobile traffic, should fix what had been a dangerous and deadly route for cyclists and scooter riders.
The coverage also alluded to the controversy of narrowing the automobile lanes from four to two and the construction cost that was about double the original $7.3 million estimate — with an overall project price tag of $27.5 million, according to Lori Weisberg of The San Diego Union-Tribune.
Not far away in downtown, upgrades to the year-old Gaslamp Promenade on Fifth Avenue may boost the cost of the project from $45 million to $65 million.
Both projects have considerable merit. The Pershing Drive changes improve safety, not just with the bike lane but by reducing the automobile speed limit from 50 mph to 35 mph. The enhanced Promenade, according to ers, would become more of a regional attraction in addition to enticing nearby conventioneers, and do away with its current makeshift feel.
The price escalations resulted from somewhat different circumstances.
The bikeway encountered various delays, bureaucratic and otherwise, some of which were caused by flooding, according to officials. That $7.3 million estimate was included in action taken by the board of the San Diego Association of Governments, the regional planning agency, in 2013.
The Promenade proposal was substantially changed, adding a projected $20 million to the bill.
Those are common explanations — along with unpredictable inflation, rising costs of materials and labor, etc. — for why projects often cost more than d.
Estimates that are outdated, or simply too low to begin with, make it difficult to assess whether a project is worth the cost until sometimes it’s too late.
San Diego has had some notable projects come in well more than originally projected.
• The Horton Plaza park and amphitheater budget in 2013 rose nearly 24 percent to $16.7 million. (The park has been unavailable to the public during redevelopment of the former shopping mall.)
• The Blue Line trolley extension was completed for nearly $2.2 billion, after an initial estimate of $1.24 billion.
• The $27 million Harbor Drive Pedestrian Bridge came in $14 million more than an earlier projection.
• The cost of the regional network of bike lanes in late 2021 was estimated at $446 million, more than double the estimate.
What can be done? In some cases, not much. The aforementioned inflation and increased cost of construction can explode budgets.
But San Diego City Auditor Andy Hanau last year released a report concluding costs can be kept down and delays lessened by proper vetting of municipal projects — and that nearly half of the city’s infrastructure projects aren’t adequately vetted.
Compared with the sufficiently vetted projects, those that aren’t typically cost nearly three times as much and took an average of four years longer to complete, according a story on the audit by David Garrick of the Union-Tribune.
Properly vetted projects sometimes run into higher costs, the audit said, but in those cases the increase over initial estimates was only about 3 percent.
The website Practical Engineering, in a brief online seminar, said an estimate becomes “meaningless without more context about when it was developed and what it includes.”
“Cost estimates have an expiration date, a concept that gets overlooked, sometimes even by owners, and often by the media who report these numbers,” according to the website.
The process of budgeting and securing funds is slow, which sometimes means the design professional who should be estimating the costs doesn’t. For infrastructure projects, that’s often done by the engineer “and engineers are notoriously not good at estimating costs,” according to Practical Engineering.
So how did the airport do it on Terminal 2?
According to an article published on the website Airport Improvement, a lot of credit goes to bringing together the designer, contractor and other project partners as a team early and the use of “building information modeling” — a 3D tool that can show the consequences of changes and help iron out conflicts before construction starts.
But a big factor was a post-recession drop in construction costs and lower bond rates than projected — which averaged about 4.2 percent instead of the 6 percent to 6.5 percent the airport estimated during planning.
That was then.
The airport is now building a new Terminal 1, with the first phase on schedule to be finished next year, with full completion expected in 2028. Much is different than when Terminal 2 was built. For example, a recent bond issuance rate of 5.18 percent.
In January, the San Diego County Regional Airport Authority board increased the project budget from $3.4 billion to $3.8 billion, according to an airport official, “to reflect the rising costs of everything.”
