Increased costs straining St. Pete construction projects

Construction inflation is the city of St. Petersburg's first unwelcome guest of 2016, where ongoing projects could begin to cost more than expected for the city and taxpayers.

"There's several projects that we need to be taking this into account- and we will," mayor's office spokesman Ben Kirby confirmed Monday. "Perhaps we need to cut some things, perhaps we need to scale some things back." 

The city has four major projects totaling $200 million scheduled to start this year, beginning with a $65 million "biosolids" sewage treatment system on this week's city council agenda. The new process will generate a natural gas that can be used to fuel the city's sanitation fleet. 

Missing from the first $65 million request:  Funding for a filling station to put the gas in the trucks.

An internal meeting is planned for mid-January between police administrators and the mayor's office about a proposed $70 million police headquarters. 

"We have to look to the administration for some direction," police spokesperson Yolanda Fernandez told FOX 13 News. "Are we looking to build a police department for our current staffing, or do we want to build something that would accommodate growth for the future?" 

Fernandez said the new police station is still early enough in the planning process that adjustments can be made. 

"Do we build a parking garage? Do we not?" she gave as one example. "Maybe we can offset some of those costs, but then where do we park the cars?"

The city has another $65 million set aside for a new St. Pete Pier and a companion "pier district" project. 

"One thing we know about the Pier is that the mayor has remained really firm on that one number and the we weren't going to go above that" Kirby said.

Sources tell FOX 13 News that all of the projects anticipated a 2-4 percent "construction inflation" factor. The current building boom in Florida, compounded by an exodus of construction workers from Florida in the Great Recession, has created labor and material shortages. 

Commercial construction inflation in 2015 may have been in the 5-8 percent range. 

"When you take a project this large- $70 million- a small percentage can add up to a lot of money," Fernandez pointed out.