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Recommendation to waive the bidding process to hire Premier Design and Build Group for $208,193 to provide construction management services and award a competitive bid to $1,596,700 dollars to Johler Demolition for the demolition of the Linneage warehouse in Tax Increment District Seven
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Submitted by:
John Ruggini
Department:
Finance Department
A. Issue
The Common Council approved a Purchase Sale Agreement for the City acquisition of the Linneage Warehouse within Tax Increment District Seven on March 17, 2026. The City is currently within the due diligence period but expects to close on the property by early Fall with the possibility of Linneage vacating by late 2026. To be prepared to demolition the building, the City, through its development partner, recommends hiring a construction manager and demolition contractor.
B. Background/Options
The master plan for the Burleigh Traingle, Tax Increment District 7 contemplates redevelopment of the Linneage Warehouse which has operated in this location under various owners for decades. On March 17, 2026 the Common Council approved a Purchase Sale Agreement negotiated by the City and its development partner, Citadel.
The due diligence process has been proceeding smoothly and we expect to close on the property by early Fall. While Linneage has six months after close to vacate the property, it appears they may vacate before year’s end. To maximize the opportunity for redevelopment, we would like to demolish the building as soon as possible. To do that, we recommend hiring a third party construction manager and demolition contractor.
Premier Design and Build Group has functioned as the City’s construction manager in partnership with Citadel, the master developer and exclusive landowner for prior phases including the demolition of the Schoeneck warehouse and construction of civil infrastructure. Given their familiarity with the site, I recommend waiving the biding process and hiring them as the construction manager for the project. Their proposal is attached and their total fee including insurance represents 4.5% of the total demolition cost. This is on the low end of industry standards. Their general conditions includes on-site staff and site security is $208,193 which represents 13% of the demolition cost. This is on the higher side of industry standards, but when inspecting their line item detail, appears reasonable.
Premium solicited competitive bids for this project. Johler Demolition was the lowest responsible bidder at $1,596,700. Two other responsible bids were received and ranged from $1.9 to $2.2 million.
C. Strategic Plan (Area of Focus)
Economic Development & Financial Resilience
D. Fiscal Impact
Tax Increment District seven is forecasted to have sufficient increment to pay for the associated debt service for this project.
E. Recommendation
I recommend waiving the bidding process and executing a contract totaling $279,292.00 with Premier Design and Build Group for construction management services. I also recommend awarding a demolition contract to Johler Demolition for $1,596,700 plus $100,000 contingency. Lastly, I recommend a fund transfer totaling $1,975,992 in order to provide sufficient expenditure authority. This will be funded by bond proceeds as part of the City’s normal fall borrowing.