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Local News

Santa Barbara Airport: With Bonds Set for Sale, Project Bidding Battle Intensifies

Two lowest bidders take case to Santa Barbara City Council, which puts off a decision to investigate the case of an altered letter.

Increased passenger traffic and heightened homeland security concerns are the driving factors behind the Santa Barbara Airport's Airline Terminal Improvement Project, which is in the contract-bidding process.
Increased passenger traffic and heightened homeland security concerns are the driving factors behind the Santa Barbara Airport’s Airline Terminal Improvement Project, which is in the contract-bidding process. (Lara Cooper / Noozhawk photo)

Improvements for the Santa Barbara Airport are on the horizon, but the company that will be in charge of the construction is still under debate by the City Council.

In a lengthy session Tuesday, the council heard city staff present the $63 million project that has nine bidders vying for the job. The Airline Terminal Improvement Project includes construction of a new 72,000-square-foot terminal building, demolition of part of the existing terminal, and restoring and relocating the historic 1942 airport core. The project also includes the necessary site work, landscaping, parking lots, terminal ramp and vehicle access. The existing terminal would remain operational during the improvements.

The project will be funded by airport bonds that the council approved for use on the project back in December, city Finance Director Robert Peirson said. Because the municipal bond market has largely recovered, he said, the city will put the bonds up for sale in three to five weeks to secure the best possible interest rate. Although it’s unusual to award contracts before the bonds are sold, Peirson said staff feels comfortable that they’ll be able to sell them.

The nine bids the city received range from $33 million to $39 million. The lowest responsible bidder was Santa Monica-based EMMA Corp., which offered to do the work for just under $33 million. San Francisco-based Swinerton Builders’ $35 million bid was the second lowest.

Swinerton is disputing the selection, maintaining that EMMA does not have adequate experience for the job according to the bid specifications. Swinerton has also said EMMA’s electrical subcontractor is not qualified to perform the security, telecommunications and audio paging work. The company also maintains that EMMA’s electrical subcontractor did not supply a list of its subcontractors and supplies. EMMA has since responded to the allegations and, after checking references and past projects, city staff said they feel EMMA is the correct choice for the work.

Although EMMA has never worked on an airport terminal, city staff reports said the company’s past projects were similar in complexity to the terminal improvement project.

“The fact that we have not done a terminal building per se does not mean that we do not know construction,” said Emanuel Yeshari, representing EMMA, which has undertaken numerous public projects of similar scale, including a current $28 million school project in the Los Angeles Unified School District.

The issue central to much of Tuesday’s discussion, however, was a pair of letters given to city staff, supposedly sent from Johnson Controls, which operates a security system at the airport. If selected for the project, EMMA would continue using Johnson Controls, as well. But Johnson Controls maintains it only put out one version of the letter, and William King, branch general manager of the company’s Southern California operation, said a second letter was sent by an unknown party on company letterhead that omitted a portion of the original letter. The missing statement references Johnson Controls service in the San Diego area. How the service area’s inclusion or omission might affect the project remains to be seen, but the alleged tampering was cause for alarm.

The Santa Barbara Airport's iconic original terminal building will be relocated and restored as part of the $63 million Airline Terminal Improvement Project.
The Santa Barbara Airport’s iconic original terminal building will be relocated and restored as part of the $63 million Airline Terminal Improvement Project. (Lara Cooper / Noozhawk photo)
“This altered document is horrendous,” said Robert Jeppesen, division manager of Taft Electric, which would be part of the project should Swinerton be granted the bid.

Johnson Controls has offices as close as Simi Valley and Cypress, King said, prompting Councilwoman Iya Falcone to ask what the effect of the redacted language would be.

“Johnson Controls’ main concerns are two-fold,” King said. The first, he said, is for the airport to continue service with the Johnson Controls system through an authorized distributor.

“To be honest with you, the contractor you buy through doesn’t really matter to me,” King said.

King said that when Johnson Controls learned one of the authorized distributors sent the altered letter up through the contracting chain, the company thought it was important to look into the matter. “Somewhere in the contracting chain, somewhere the letter was changed,” he said.

Contractors are not required to report subcontractors whose work value is one-half of 1 percent of the total bid, and Johnson Controls principal engineer Owen Thomas estimated that the value of the work done by his company was about $130,000.

City Staff said they had confidence in EMMA as the project’s construction company and that they had performed adequate due diligence.

Councilman Das Williams said he was concerned.

“If staff is telling us that the reason we shouldn’t worry about this is because it is too small of a matter, I don’t feel that is a sufficient answer,” he said. He added that someone was trying to defraud the city by falsifying a letter.

“This is a pretty serious allegation,” City Attorney Steve Wiley said. However, he said there were few substantive grounds for the city to reject EMMA’s bid and he said there could be other explanations for the letter, such as a computer error. He reminded staff that they had yet to hear from the author of the letter.

Wiley asked that both contractors add an additional 30 days onto the traditional 90-day waiting period so more investigation could be done. Both companies agreed.  The item will be continued at the March 24 council meeting.

Through the years, the terminal has become crowded because of a steady rise in passengers, as well as a pronounced increase in security equipment as mandated by the Homeland Security Department after the 9/11 terrorist attacks.

The proposed new terminal is expected to open around the beginning of 2012, and will be located directly to the south of the current one, which will remain in use throughout the construction. Among other things, the new two-story terminal will provide passengers with restaurants, restrooms and gift shops on the other side of the metal detectors, near the gates.

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