A rainy view of Johnson Hall Performing Arts Center on Water Street in downtown Gardiner on July 9. Joe Phelan/Kennebec Journal file

GARDINER — Earlier this month, the Johnson Hall Performing Arts Center received $100,000 in Community Development Block Grant funds that will help pay for the renovation that’s slated to start in April.

But even as that federal funding pushes Johnson Hall closer to its fundraising goal, the impact of pandemic-driven inflation is expected to affect the project’s final cost.

Ganneston Construction, the Augusta-based construction manager for the historic opera house’s renovation project, has been developing the anticipated project costs.

“When we initially priced the project it was lower,” said Stacey Morrison, owner and chief executive officer of Ganneston Construction.

Now, Morrison said, her firm is developing cost estimates with a contingency built in.

“Do we see numbers coming down? Who knows what’s going to happen, honestly?” Morrison said.

In 2021, fundraising has continued on a strong pace and 2022 is expected to be the same.

In July, Michael Miclon, the executive artistic director for Johnson Hall, announced that construction will start in April. At the same time, he announced a fundraising matching challenge, thanks to a $250,000 gift from Peter and Sandra Prescott and Team EJP.

That matching goal was met in November, leaving the project the closest it’s come to meeting its fundraising goal of $5.5 million.

In April, Johnson Hall submitted a request to the office of U.S. Rep. Jared Golden, D-Maine, for $350,000 in federal funds under the Community Project Funding Program, under which every congressional office can submit requests for federal funding for projects in their districts as part of the federal budget. U.S. Sens. Susan Collins and Angus King also included Johnson Hall in their requests.

The amount, targeted to pay for life/safety projects like a sprinkler system, was raised to $411,710 and passed the U.S. House of Representatives as part of its appropriations process. Since then, a series of continuing resolutions extending federal government funding has delayed budget decisions. The most recent continuing resolution passed stopgap funding to keep the federal government operating until mid-February, but it doesn’t fund the Community Project Funding Program.

Other fundraising efforts and gifts have pushed Johnson Hall closer to its goal.

But as Johnson Hall has continued to plan for its construction project, the global COVID-19 pandemic has disrupted production of building materials, the supply chains that bring them to market and the supply of workers. That is being reflected in the construction costs for a wide range of projects, including Johnson Hall’s.

When Johnson Hall kicked off its fundraising campaign in September 2016, the cost was pegged at $4.3 million, a target that’s been revised in the last five years as costs have risen.

In 2019, the Northern Border Regional Commission had awarded $387,000 for accessibility improvements to the building. Miclon said the Community Development Block Grant funds announced earlier this month are expected to cover increases to costs to make the theater fully accessible.

Other costs are changing as well.

“We’re prepared for an increase to the materials and labor costs that have developed due to COVID-19 and therefore expected to continue fundraising during construction,” Miclon said.

Mike Adams, the estimator and project manager on the Johnson Hall project for Ganneston Construction, said the majority of bids that have been submitted with a disclaimer.

“I kind of say in a joking, simple way that the bids are good until the ink dries,” Adams said. “In the market right now, it’s easier to get a hard quote for a job that’s three to six months than it is for a job that’s, say, one, two or three years long. Contractors feel like they’re gambling their whole company at times, because they don’t really know where things are going to land.”

Typically, quotes for steel have been good for about 30 days, he said. Now, they’re good for about five to seven days.

“When we say we build in a contingency, we’ve built in a factor into our price that if steel goes up between now and when we actually start a project, we’ve got a built-in escalation for that,” Adams said. “If it doesn’t, and those funds don’t get used, they go back to the owner.”

For Adams, the only other event he’s seen in his career to rival the pandemic economically was the energy crisis of the 1970s, when the price of energy spiked. At the time, he was working in the field for a different contractor.

“It was a pretty wild show trying to get projects done fast enough and stay on budget,” he said. “It was similar, but not the magnitude it is now.”

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