What was originally a roughly $3 million project to grade a pad at the 3,500-acre Southern Virginia Mega Site at Berry Hill is now about a $3.7 million endeavor.
The contractor grading the site discovered additional bedrock during excavation, which will require additional labor for the project and increase its cost by about $745,000.
Also, the extra cost will include work to be performed to adjust the elevation of the pad to make it more marketable to prospective industries, Pittsylvania County Economic Development Director Matt Rowe told the Danville Register & Bee on Thursday afternoon.
“We’re trying to make it easier for future tenants to develop the site,” Rowe said.
Adjusting the pad’s elevation allows drainage over the site to be changed and alters the soil profile, Rowe added. Such changes can reduce project timelines and costs, he said.
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“When someone is building, you’ve got to dig into the dirt,” he said. ‘We’re looking at all kinds of ways to make that pad we’re already grading more marketable.”
Rowe estimated the rock covered a roughly 100-foot-by-200-foot area.
“It’s an area of broken-up material,” he said, adding that a portion of the rock is being removed.
The Danville-Pittsylvania Regional Industrial Development Authority approved the change order for the project by a 4-0 vote at a special called meeting Friday morning at City Hall.
The contractor, Jimmy R. Lynch & Sons in Pilot Mountain, North Carolina, began work on the grading project last summer, Rowe said. The estimated cost of the project was originally about $5.2 million, but ended up coming in way under budget — at a cost of about $2.9 million before the price increase.
RIFA received grants from the Virginia Tobacco Commission ($2.6 million) and the Virginia Business Ready Site Program ($1.3 million) to help pay for the project. RIFA was required to provide 50% matching funds for the grants.
However, “we were able to leverage the same local match amounts for each grant, which greatly reduced our overall match amount,” Rowe said.
In addition, the initial price of the project turned out to be much lower than expected, so RIFA used some of its available remaining matching funds to grade a 17-acre site at the Cyber Park. That project is expected to be complete in February, Rowe said.
During the RIFA meeting, finance director Michael Adkins said money from the authority’s unrestricted fund balance will cover the extra $745,000.
There is currently about $840,000 in RIFA’s unrestricted fund balance, Adkins said. Officials expect to receive nearly $100,000 in revenue from sales of timber at the mega site, which will go to that fund, he said.
RIFA Board Chairman Vic Ingram pointed out that it’s not unusual for contractors to encounter rock during grading projects.
“This is not uncommon,” Ingram said during the meeting.
The special called meeting was held so the board could approve the change order before the contractor had cleared its equipment from the site, Danville City Manager Ken Larking told the Danville Register & Bee.
“Our contractor was mobilized and had completed all the work,” Larking said. “We needed the change order so they could go ahead and continue working.”
If RIFA had waited until equipment was removed from the site to approve the change order, there would have been cost for the contractor to re-mobilize at the site, Larking said.
In another matter, RIFA approved preparation of a $90,000 survey of parts of the mega site to be performed by Dewberry Engineers, Inc.
Known as an ALTA survey, it will cover the formal boundaries of an 831-acre portion of the mega site property. The survey will capture the site topography to make sure the boundary lines are confirmed and no other parties have any rights to the property.