Friday, February 10, 2012

Barclays Center completion date pushed back a week, but arena "is slightly ahead of schedule." How so? They changed the schedule to erase delays.

Delays are taking their toll on Barclays Center construction, pointing to a hectic--and perhaps nerve-wracking--pace to the finish line.

Not only is the Carlton Avenue Bridge delayed, the substantial completion date for the arena has been nudged back one week for the second time in five weeks, to 9/5/12. That gives arena operators little more than three weeks to test building systems before the first event, a 9/28/12 concert with superstar Jay-Z.

Also, after a report in January indicated that the Barclays Center was behind schedule, a new report from the same construction monitor asserts that the arena is "slightly ahead of schedule," based on actual cash flow versus projected cash flow.

(The final completion date is 6/30/13, which indicates additional work will have to be done while the building is operating.)

Presto: the arena's ahead

Top chart from Feb. 2012
bottom from Jan. 2012
That happy conclusion, however depends on changing the schedule, a slight-of-pen unacknowledged in the latest Site Observation Report by Merritt & Harris, the real estate consultant to the arena PILOT Bond Trustee. (Dated 2/6/12, it's based on a visit of 12/22/11 and a documents review.)

Merritt & Harris chronicles construction progress via charts, like the ones at right. (Click on all graphics to enlarge.) The solid circles represent projected cash flow, while the hollow circles indicate actual money spent.

The top chart at right, taken from the February report, suggests that actual spending handily outpaces projected spending.

However, the chart accompanying the January report, in bottom at right, points to a convergence of the two trend lines. As I wrote 1/5/12, the data  indicated that the arena had been slightly behind for three months.

Changing the schedule

How to get around that problem? Change the schedule.

Top chart from Jan. 2012
bottom from Feb. 2012
By stretching out the timetable to meet the hard cost spending total of $485 million-plus, current spending can be portrayed as outpacing the projected spending.

Take a look at the graphic at left. In the top half, from the January 2012 Merritt & Harris report, as of the June 2013 final completion date, there would be $485,012,000 spent, or 100% percent of the total.

In the bottom half of the graphic, from the February 2012 report,as of the June 2013 final completion date, there would be $479,818,000 spent, or 98.88% of the total. Each previous month has a target completion percentage lower than in previous reports.

There's no indication of when 100% would be spent.

The bottom line

In the last three reports, Merritt & Harris has moved back the substantial completion date for the arena from 8/23/12 to 8/30/12 to 9/5/12.

(In last month's report, the firm, also moved back the completion date for site work around the arena to 9/25/12 from 8/29/12, but this month moves it up to 9/5/12.)

The overall construction schedule points to challenges in meeting the June 2013 final completion date. While that may set up snags in coordinating construction efforts with arena activities, the more lesson is this: these documents are tough to trust, as significant changes are presented with no acknowledgement or explanation.

Transit connection delayed

As noted in the screenshot at right, according to the Construction Progress Chart (below), based on cash flow, "the Arena is slightly ahead of schedule, while the Transit Connection is approximately 2 months behind schedule."

However, because there's some slack in the schedule--the Transit Connection isn't supposed to open until the arena does--the "additional 2 months will have no impact on the overall project schedule"

A new schedule to be issued this month is supposed to include all delays and establish the final completion date.

In the screenshots below, I've highlighted some figures on the chart, notably the percentage difference between actual and projected cash flows--percentages that have changed as the schedule was attenuated--as well as the percentage completion expected in the last few months of the project.

February 2012 report

January 2012 report




December 2011 report

November 2011 report


The transit connection

The report states that "due to early delays" the Construction Schedule slipped by approximately 2 months." 

That simply doesn't compute. The early delays had no significant impact, because the transit  connection was well ahead of schedule for many months. 

The project began, as the graphic below indicates, in August 2010, and didn't start to lose ground until July 2011.

When is substantial completion for the arena?

In April 2001, the substantial completion date was nudged back two weeks from 8/12/12 to 8/27/12, but in October 2011 was nudged forward to 8/23/12. That number stuck through December 2011.

As noted, in the past two reports the date has slipped by a week each month.

December 2011 report

Note the substantial completion date of 8/23/12 for the arena and 8/29/12 for the site work.



January 2012 report

Note the substantial completion date of 8/30/12 for the arena, a weeklong delay, and 9/25/12, nearly a monthlong delay, for the site work.


February 2012 report 

Note the substantial completion date of 9/5/12 for the arena, while that is now the date for the  site work, as well.



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