Development

Costs Surge as Donoe Estates Housing Project Resumes with New Contractor

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The Donoe Estates public housing project, which had been suspended due to various complications, is set to resume under the stewardship of a new contractor, as reported by the Consortium. Originally breaking ground in January 2021 with an anticipated budget of $58 million for the 84-unit development, the project encountered significant setbacks that led to a halt in progress.

During a recent Public Finance Authority Board meeting, questions regarding the project’s status were raised. Adrienne Williams-Octalien, Director of the Office of Disaster Recovery, reported a request for an additional $35 million. Subsequent discussions revealed that initial developers Pennrose and GEC exited the project last September after facing prolonged challenges, including delays in material procurement and necessary environmental remediation efforts, which escalated costs to $65.9 million.

Williams-Octalien hesitated to specify the current progress of the development but confirmed the selection of J. Benton Construction as the new contractor. This contractor has proposed an additional $47 million to complete the project, potentially doubling the original budget to $105 million. This proposal is currently under review to confirm the legitimacy of the escalated costs.

The director clarified that the extra funding would be sourced from the Community Development Block Grants for Disaster Recovery (CDBG-DR), allocated by the Department of Housing and Urban Development. Some funds initially earmarked for other uninitiated projects may be redirected to ensure sufficient capital for the Donoe Estates project’s continuation.

Despite an interruption that will undoubtedly extend the project’s timeline, Williams-Octalien expressed optimism about its completion. She mentioned that the project’s financing strategy includes utilizing remaining funds from the initial budget in conjunction with the anticipated new funding.

The bond issued for the initial contractors remains unpaid, as the bond company did not accept the Housing Authority’s claims of contractor fault, leading to an amicable contract termination. Williams-Octalien emphasized the importance of validating the new contractor’s cost estimates to expedite the project’s resumption.

Attempts to contact the VI Housing Authority for further comments were unsuccessful.

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