Champion Environmental Services, Inc. Comments on Job Contract Revoked

Champion Environmental Services, Inc. was awarded a demolition contract in 2008 to demolish the Wisconsin Memorial Hospital. After submitting the low bid, Governor Jim Doyle officially cancelled the contract seeking input on the possibility of adaptive reuse for the property. Local and legislative movement pressured the state to reexamine the prospect of renovation versus demolition.

Last week, news writer Paul Snyder of the Daily Reporter contacted CESI seeking a statement on having the contract pulled. I spoke with Mr. Synder at length as to how commonly this occurs in the demolition industry. The scenario is often as such: A building sits idle becoming an attractive nuisance thereby forcing a municipality to secure funding to remediate and demolish the building; when the reality settles in of impeding loss, groups often react to save such properties.

Recent activity at Michael Reese Hospital in Chicago (The Public Building Commission is seeking “Request for Qualifications” for demolition of the hospital) or the Michigan Central Train Depot in Detroit (the mayor sought an emergency demolition order) illustrate two high profile cases of local efforts to block demolition efforts.

The ire over demolition emanates from several sources. Sometimes preservation groups want to save what may be deemed a historical entity and at other times local tax payers are not happy about the cost of razing coming from their pockets.

The position for Champion Environmental Services, Inc. is that while it is disappointing to loose a job, we garner little from challenging opponents; the reality is that when a situation is out of our hands we choose to move forward and seek other opportunities.

I would like to thank Mr. Synder for an accurate portrayal of our position in this matter.
The two articles written by Mr. Synder appear below.

Hospital revival costs demo contractor a job
-->Published: May 15, 2009
PaulSyder
paul.snyder@dailyreporter.com

A late-inning rally to save Wisconsin Memorial Hospital in Madison left Champion Environmental Services Inc. with a state demolition contract but nothing to tear down.
“It’s a little disappointing, sure, because it’s a nice job,” said Terry O’Rourke, vice president of the Gilberts, Ill.-based contractor. “But it’s the state’s decision. It’s out of our hands. We’re fortunate in that we’ve got other projects, because this might have been a make-or-break job for another company.”

Champion last year submitted the low bid to demolish the 89-year-old hospital on the Mendota Mental Health Institute campus. The Wisconsin Historical Society in 2007 recommended demolition as the most cost-effective solution for the vacant building, and the state Building Commission in January 2008 approved spending $541,000 to take the structure down.
Champion’s $198,000 bid came in far below the initial estimate and the contract was finalized, although the state never gave the contractor a green light.
Oregon-based Gorman & Co. Inc. last summer proposed saving the building — at no cost to taxpayers — and leasing it to Catholic Charities of Madison for drug and alcohol treatment.
Gorman’s plan would use an estimated $3.4 million in tax credits for affordable housing and historic preservation.

But the state Department of Health Services last year was unsure if Gorman & Co. would be able to get the promised tax credits, said spokeswoman Stephanie Marquis.
“We were concerned about rehab costs and believed the costs were overstated,” she said. “We were worried about who would pay overruns if those came about, and also the fact that (the Wisconsin Housing and Economic Development Authority) actually stipulates it won’t provide tax breaks if a building is used as transitional housing.”
Gary Gorman, president and CEO of Gorman & Co., said any concerns about cost overruns reflect a “fundamental misunderstanding” of his proposal.
“We would not propose they sell us the building,” he said. “But we would set up a long-term lease. The risk and reward associated with the project would be completely in the private sector.”

Gorman said he is still uncertain about how much it would cost to renovate the hospital.
“It’s still a very preliminary conversation,” he said. “The fundamental question is: Does the state want to save the building or not? And right now, it’s saying it does.”
Gov. Jim Doyle last week officially cancelled demolition and directed DHS to review the possibility of saving the building.

Marquis said if renovation cannot be done without costing taxpayers, the state likely will rebid the demolition contract.
“The cost to taxpayers has been a big factor since the beginning, and the first determination was that demolishing the building seems to be the most cost-effective solution,” she said. “We always try to be very responsible stewards for the state.”
But that does not mean Champion will return with its $198,000 bid, O’Rourke said.
“I don’t know whether we would try again,” he said. “It would mean a reassessment if and when that happens and looking at what other work is out there and what other work we’re doing. You’ve always got to be out looking for the next job.”
Related Story: Change of heart common in demo business



Change of heart common in demo business
-->Published: May 15, 2009
Paul Snyderpaul.snyder@dailyreporter.com
Wisconsin’s decision to review a redevelopment project for the Wisconsin Memorial Hospital more than a year after agreeing to demolish the building is just one instance of a common occurrence.

“This kind of thing happens every year,” said Terry O’Rourke, vice president of Gilberts, Ill.-based Champion Environmental Services Inc. “Someone decides to tear a building down, it gets voted on, and you go to a contract.“Then someone from the community gets upset about it. You have to be ready for it.”

But O’Rourke said Champion will not fret about Wisconsin’s decision to cancel the company’s planned $198,000 hospital demolition. The company has other work to complete, he said.
Other companies, meanwhile, are still on the hunt for whatever they can get.
De Pere-based Badgerland Demolition & Earthwork Inc. will bid on the hospital demolition again if the state chooses to rebid, said Dave Williquette, the company’s president.
“We’re not going to work to a point of not turning a profit, but the fact is it’s work,” he said. “It makes sense to go after it again.”

Badgerland submitted a bid of $323,000 for the work last year, and even with the knowledge it lost by $125,000, Williquette said, Badgerland will not change the bid.

“Things could change,” he said. “Maybe the low bidder doesn’t try again. Everything you hear about the tough market applies 100 percent to demolition contractors, too, and we’ve seen this situation before. You put in the low bid on a project, and then the owner just lets it sit there.

Related Story: Hospital revival costs demo contractor a job
“It’s frustrating, but you’ve got to wait for the phone to ring.”