I continue to have uneasy feelings about the design and management of Richmond’s $105 million Civic Center rehabilitation project (see City Council Launches Civic Center Project on a Wing and a Prayer, December 23, 2006).

 

It has taken me a while to collect the information and documents that describe the contractual and organizational context intended to result in project implementation, but what I have gathered scares me.

 

In my experience, good project management requires a clear delineation of authority and responsibility for decision making. Imagine a small project, like adding a bedroom to your house. You are the client. You hire an architect to design it. You hire a contractor to build it. Both the architect and the contractor work for you under terms of a written contract that spells out scope, program, cost and schedule, and owe you a fiduciary^[1] responsibility.

 

The Civic Center project is not like that. Take a look at the organizational charts I obtained to try and understand this. The first chart (click here) is pretty straightforward as far as it goes. It shows chain of command flowing from the City Council through the city manager, through Steve Duran and finally, to Mack 5.

 

Wait a minute; who is Mack 5? It turns out that Mack 5 is a consulting firm that provides project management services. The firm’s website says:

 

At MACK5, we oversee projects from beginning to end, coordinating and controlling cost, quality, schedule, technical and sustainable performance, the design process and execution. At times we perform select services, such as cost planning and estimating or property management. We focus on cost and process.

 

Instead of working for the City to manage the Civic Center project, Mack 5 has a contract (click here) with Richmond Civic Center Partners, LLC, (RCCP) the “shell” company under contract with the City to “develop” the Civic Center. In order to “clean up” this oversight, an amendment (click here) was prepared to circuitously designate the City of Richmond as the “beneficiary” of the services performed by Mack 5.

 

While to legal minds, this may provide the desired fiduciary link, it’s sure a peculiar way to go about it. For an organization that is now the critical project management link between the City of Richmond and RCCP, one would expect more clarity. Reviewing the Mack 5 contract and its amendment raises a number of additional questions:

 

1.      Amendment No. 1 is undated.

2.      Amendment No. 1 is signed by a different person (Danielle Curls Bennett, President, Alliance Property Group, Inc.) than the original contract (Harley Searcy, Chief Executive Officer, Alliance Property Group, Inc.).

3.      The City of Richmond is not a signatory to the Mack 5 contract.

4.      The contract is vague and lacks detail. It has no defined scope of work, schedule, outcome or budget. It doesn’t say which individuals will be performing services or what their qualifications are. Presumably, everyone working on the project will be paid $135 per hour, regardless of whether they are sorting paper or providing top-level management advice.

5.      There are no specific requirements for insurance coverage, and there is no requirement for Mack 5 to carry professional liability insurance, although they are providing a professional service with potential consequences for the City in the tens of millions of dollars.

6.      The City of Richmond is indirectly paying for Mack 5’s services and is the intended beneficiary. Why not cut out the middle man and retain Mack 5 directly?

7.      There is no indication that Mack 5 personnel assigned to this project are licensed architects or engineers or otherwise have the qualifications and experience to manage a $105 million project of this type.

8.      Despite my several; requests, I have received no confirmation that the city attorney reviewed and approved this agreement.

 

Some people might say this looks like the hen watching the fox house.

 

So, let’s move on down the chain of command to the people who are actually going to design and build our new Civic Center. Presumably, this relationship is described in a supplemental chart (click here), which dangerously resembles a spider web. If you can sort through the boxes, arrows and lines, you will find an obscure box, with three degrees of separation from the City of Richmond, labeled “architects/engineers/consultants,” the people who are actually spending the $10.5 million authorized in “Phase 1A” to design the project.

 

At least, this new chart has the architect in it, unlike the organization chart included in the agreement between the City and RCCP.

 

Incidentally, the arrangement whereby the City of Richmond contracted indirectly for architectural services through RCCP is now under formal investigation by the California Architects Board as a potential violation of the Architects Practice Act.

 

Mack 5 appears to be a somewhat stealthy player. Despite their key role in this project, they have never appeared before the City Council or any of its members or provided any written report of their oversight.

 

So, who is looking out for the City’s interests in making sure the project is appropriately designed for its intended function? It turns out that the much maligned Design Review Board, unpaid and under siege by the City Council, has made a huge contribution in this regard.

 

For example, it was the Design Review Board that pointed out that the current plan to turn the Bermuda Room into the future Council Chambers may have a serious problem in that it is only a little more than half the size of the current Council Chamber on Marina Way South. Furthermore, the proposed entrance to the chambers is through an over-flow room and then to enter the chambers one passes very close to the podium, a potential circulation and disruption nightmare.

 

While I wholeheartedly support the Civic Center project, I believe the unnecessary complication set up by City staff to implement it is already becoming a nightmare and could ultimately become a disaster. I suggest the following:

 

1. Scrap the existing contract with RCCP and craft a new conventional design-build agreement with a joint venture of only two parties, the architect and the contractor.
2. Either directly or indirectly, such as through a construction management firm, the City should retain the services of an architect experienced in civic center facilities to provide an independent peer review of the project and advise the City regarding program, design and budget.
3. Schedule periodic design and construction team meetings that are open to Council members.
4. Open up the process so that the public can follow exactly what is being designed as it evolves. This can be easily done by setting up a project website that has updated documents, including graphics posted on a regular basis.

 

I know that there are a number of attorneys and people with design and construction experience who subscribe to my E-FORUM. I would appreciate your review of my critique of this Civic Center project. Do I have a reason to be concerned, or am I just paranoid?

 

^[1] The fiduciary duty is a legal relationship between two or more parties (most commonly a "fiduciary" or "trustee" and a "principal" or "beneficiary") that in English common law is arguably the most important concept within the portion of the legal system known as equity. Since the Judicature Acts merged the courts of Equity (historically based in England's Court of Chancery) with the courts of common law, the concept of fiduciary duty also became usable in common law courts.

A fiduciary duty is the highest standard of care imposed at either equity or law. A fiduciary is expected to be extremely loyal to the person to whom they owe the duty (the "principal"): they must not put their personal interests before the duty, and must not profit from their position as a fiduciary, unless the principal consents. The fiduciary relationship is highlighted by good faith, loyalty and trust, and the word itself originally comes from the Latin fides, meaning faith, and fiducia.

When a fiduciary duty is imposed, equity requires a stricter standard of behaviour than the comparable tortious duty of care at common law. It is said the fiduciary has a duty not to be in a situation where personal interests and fiduciary duty conflict, a duty not to be in a situation where their fiduciary duty conflicts with another fiduciary duty, and a duty not to profit from their fiduciary position without express knowledge and consent. A fiduciary cannot have a conflict of interest. It has been said that fiduciaries must conduct themselves "at a level higher than that trodden by the crowd."^[1]