Tuesday, August 29, 2000

Stadium idea revamped

County backs down on demand for just one insurance bonding firm

By Ken Alltucker
The Cincinnati Enquirer

        Flooded with letters from contractors and insurers threatening to walk away from the new Reds stadium, Hamilton County officials on Monday dropped a plan to choose one insurance bonding company for the entire $280 million project.

        Instead, the county will revert to the same method it used for construction of Paul Brown Stadium — letting contractors pick their own bonding companies as a financial guarantee that they will finish the job. That will save costs and encourage more contractors to bid for work at Great American Ball Park, officials said.

        “Basically, it was an ill-conceived idea,” said Tom Chatham, president of O'Leary-Kientz Inc., a Cincinnati insurance and risk management firm. “The county administration did not thoroughly check out the information.”

        Hamilton County Risk Manager Tim Grabenstein, relying on advice from consultant Marsh USA Inc., proposed using one bonding company for the entire project and supervised a bidding process for the job. He trumpeted the plan as a way to trim costs and avoid the $46.2 million in overruns that have plagued construction of the new Bengals stadium.

        On Monday, Mr. Grabenstein said he still believed that using one insurer was the best choice, but he said he just didn't have enough time to develop a proper bidding and selection process.

        Mr. Grabenstein had solicited bids from five contractors to be the sole bonding company for the stadium project.

        But records show four of those companies — Great American Insurance, CNA Surety, Chubb and Liberty Bond Services — responded only to capture their normal business. Only Zurich U.S. Construction wanted to be the sole bond insurer for all construction at Great American Ball Park. Citing trade secrets, Mr. Grabenstein has not released the contents of Zurich's bid.

        Under the plan presented by Mr. Grabenstein on Monday, any insurance bonding company will be allowed to work on the stadium as long as it has a strong balance sheet and agrees to reveal how much it charges for services. The county also will encourage small businesses and firms owned by females and minorities to bid for work.

        “It was a great decision that ought to be commended,” said Judy Short, executive director of Allied Construction Industries, a local trade group. “We met with all the commissioners individually, and they really listened to us.”

        Mrs. Short's group claimed that contractors would hesitate or refuse to bid for stadium work if they were forced to use another bonding company. Construction companies typically use one bonding company for all work, sharing private financial information and plans to bid on future jobs.


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