FORT WAYNE, Ind. (WANE) –With the highest inflation rate in 40 years, does $286 million go as far as it once did? Especially if you’re building a high-profile corporate headquarters just south of downtown?
Fortunately, yes, the capital stack to fund Electric Works will be enough, said Larry Weigand, CEO of Weigand Construction, because much of the project was bid when the money was secured in 2020.
“Inflation has been a big issue for the construction industry at large, but the way we bid the project and pre-purchased some items has really helped alleviate a lot of the escalation,” Weigand told WANE 15.
Before transforming Fort Wayne’s abandoned General Electric complex into the envisioned world-class mixed-use Electric Works project, RTM Development spent three tumultuous years piecing together the $286 million in public and private funding.
The idea of asking for more money or leaving part of Phase I unfinished was never a viable option.
“We had a set capital stack number that we had to hit,” Weigand said. “We really pushed this to market as fast as we could after construction documents were complete so that we could avoid any future cost escalation.”
Historically, Weigand factored 3% cost increases into most projects. With U.S. inflation rates over 8%, construction on the project would be short at least $10 million today, Weigand calculated.
Supply chain issues have also been a factor. Material might be slow to arrive or now cost 300% more. Replacement items have to be historically accurate to satisfy the requirements of the historic tax credits attached to the project.
“What we’re doing is using some alternative products that we can get quicker than the things that were specified” Weigand said. “We’re working with the design team. We’re working with the engineers to make sure what they’re putting in the projects are readily available. We make sure we get the right products in the job to stay on schedule.”
Weigand said Electric Works is on track to open later this year.