AMBASSADOR HOTEL PROJECT: COST AND TIME ISSUES SUMMARY
Cost
LAUSD believes cost differential between Alternative 1 and Alternative 4 is $95 million. Actual figure, confirmed by top cost estimation firm of Davis Langdon Adamson, is $46 million.
Major reason for cost difference: the Ambassador is simply 25% larger than what LAUSD would build new. Alternative 1 total building area is 627,000 sq. ft., vs. 460,000 sq. ft. for Alternative 4. With more than 160,000 sq. ft. extra, Alternative 1 would have to be 25% cheaper even to be equal in cost.
Davis Langdon Adamson estimate found that the cost per square foot is actually less for Alternative 1: $339 pr square foot vs. $362 for all-new construction.
LAUSD hasn’t given one penny of credit for the economic value of the extra space
. A significant portion of the extra space is completely vacant and could be utilized or leased by LAUSD, creating a value of nearly $1 million per year. Filming revenue at the Ambassador is also ignored by LAUSD: this is currently about 150 days per year, potentially another $1 million.
The extra space also gives kids larger, better facilities throughout, such as a library in a beautiful grand ballroom that’s twice the size of LAUSD’s typical libraries, and offers space for joint use with community organizations and non-profits.
Another major difference: LAUSD is assuming lower-quality materials for new construction.
LAUSD unfairly "piled on" $77 million in contingencies and cost escalators on top of the basic construction cost estimate for Alternative 1, even though most of the hotel will be gutted.
The Conservancy and LAUSD are seeking $15 million in Prop. 40 historic resource funds, monies that would not come to the project unless the Ambassador is preserved.
Even using LAUSD’s inflated numbers, the Alternative 1 costs are comparable to the budget for the proposed Belmont-Virgil 1,100-seat school that will fill additional Belmont seats. The total costs per square foot will be significantly lower than five other recently completed LAUSD projects.
Time
LAUSD has under-estimated the time to complete Alternative 4, and over-estimated the time to complete Alternative 1, according to analysis by top construction firm Poulsen Construction Management, Inc. The actual time difference is about six months.
LAUSD assumed it would take nine months to get approval from the State’s Division of the State Architect (DSA) for Alternative 1: DSA has new approval procedures for converting existing buildings to schools that will likely shorten this time to three-four months.
By phasing the work differently, starting in the low-rise portion of the hotel, work may proceed concurrently, reducing six months in the construction schedule for Alternative 1.
LAUSD has unfairly assumed that the design time for Alternative 4 is 14 months and construction time is 24 months, both of which are typical for other LAUSD schools. But this is an unusually large, complex, dense, multi-story complex that will actually take longer both to design and construct.