GMP for hospital, new Sublette Center set

Rendering courtesy of Davis Architects

Triggers construction this spring

PINEDALE – A unanimous motion by the Sublette County Hospital District (SCHD) Board of Trustees at an April 10 special meeting locked in the gross maximum price for the construction of the new critical access hospital and Sublette Center. The motion allowed the district to finalize both its contract with Layton Construction, the SCHD’s general contractor, and the paperwork from its lender, the U.S. Department of Agriculture, formally setting the building process into motion.

Trustee Dave Bell made the motion accepting the gross maximum price of $57,653,020. Trustee Jamison Ziegler seconded the motion.

Now that the gross maximum price is fixed, Layton Construction is responsible for any cost increases from subcontractors under the “construction manager at risk” contract.

The total cost for the project stands at $75,658,000, a 100-percent match with funding sources raised by the SCHD and its predecessor, the Sublette County Rural Health Care District, over the course of three years.

Karl Lueschow, of Lueschow Property Management, the SCHD’s owner’s representative, presented the balanced comprehensive budget to trustees on April 10.

Primary funding entails a $32-million USDA loan, a $25.4 million contribution from the county, a $1-million donation from the Joe Ricketts family, a $10-million federal infrastructure grant and the SCHD’s own equity and contributions.

The difference between the total project cost of $75.6 million and the gross maximum price of $57.6 million consisted of “soft costs,” professional service fees, insurance and financing rates and additional expenditures like real estate and owner contingency.

Professional service fees totaled nearly $4 million of the budget and encompassed payments to architects, civil engineers, interior designers and attorneys. The SCHD has already paid for all of these budgeted professional service fees, so that amount will not change, said Lueschow.

The SCHD also budgeted $1,350,000 to purchase real estate for the new health-care campus.

Layton Construction shaved the owner contingency category down from roughly 5 percent of the gross maximum price to 4.9 percent, saving the district $120,000. Owner contingency funds cover additional costs incurred by inflation or any other overages, explained Kari DeWitt, SCHD public relations director. Under the district’s contract with Layton, all unspent owner contingency monies will return to the SCHD at the project’s completion, DeWitt added.

Soft costs included medical equipment, building permits, utilities, furniture and information technology, plus the price to demolish the old Public Health building and relocate the irrigation ditch on the hill next to the Pinedale Clinic.

The soft-cost budget also contained $300,000 to protect the building site and construction through the winter of 2023-2024.

With the finalization of the construction contract, Layton can award bids to subcontractors for each aspect of the hospital and long-term care facility project. Lueschow told trustees he believed the construction budget carried little risk.

“These are all hard bids,” Lueschow added.

Jeremy Hobbs, vice president at Layton Construction, recognized that while all projects carry unknowns, he expects the risk for the health-care campus to remain minimal.

“We have looked at each number (from subcontractors) so many times, that my comfort level has increased,” Hobbs said.

“Everything looks consistent with what we’ve seen so far,” said SCHD board chairwoman Tonia Hoffman.

Projected construction start date – early June

The finalization of the gross maximum price and the construction contract between Layton Construction and the SCHD officially kicks off the construction process.

The SCHD and its team still needs to prepare documentation reflecting the gross maximum price with the USDA’s architect, Justin Bailey, and tie up any remaining financial loose ends, said Lueschow. Layton also requires time to notify each subcontractor that their bid was awarded.

Lueschow anticipated full construction getting underway by the first full week of June, a little later than anticipated.

In the meantime, the SCHD can complete any remaining demolition on the old ballfields and begin work to relocate the irrigation ditch, said Lueschow.

Layton can also commence preparatory work like finalizing plans and drawings with subcontractors, submitting orders for materials and fabricating necessary items for the job site, Hobbs added.

Hoffman thanked Lueschow, Hobbs and their teams for the groundwork they put into reaching a gross maximum price. Dave Doorn, SCHD administrator, expressed gratitude to Hobbs and Lueschow for maintaining a total project cost of $75 million and avoiding escalation throughout the interim between the receipt of bids in August, the SCHD’s successful campaign to bridge a funding deficit and the establishment of a gross maximum price.

Hobbs returned the appreciation, praising the SCHD’s team for its flexibility and patience.

“You’ve been really good to work with,” Hobbs said. “You’ve made all the uncontrollables bearable.”