The next few months will bring new cost estimates for the Lexington High School project. Will a revised estimate result in a budget lower than the current $662 million figure? Or higher? How will new policies put in place by the Trump administration impact this huge construction project? Stay tuned, Lexington!
Since our last update, the project team, the School Building Committee (SBC) and Permanent Building Committee (PBC) have been hard at work developing the Schematic Design. The work involves confirming the design features, such as identifying spaces to be air-conditioned, unveiling exterior design plans, reviewing space layouts and options for potential future expansion, and exploring lighting and material choices for the fields. The SBC website contains extensive information on these efforts.
Beginning in June, the project enters the cost estimating phase of Schematic Design. The project team led by the SBC, SMMA (Lexington’s designer), and Dore & Whittier (Lexington’s project manager) will submit materials to two cost estimators (including Turner Construction, Lexington’s construction manager) to develop a definitive estimate by the end of August. A district needs to follow strict Massachusetts School Building Authority (MSBA) process guidelines. To paraphrase the Mandalorian, “This is the way.” Thus, the MSBA mandates that formal evaluations of more efficient/less costly options (”value engineering” or VE) will occur after the estimates are completed.
This phase will culminate on August 18, when the SBC will vote to approve the Schematic Design and its cost, and send it off to the MSBA for its approval. In the fall, the action moves to Town Meeting and to the debt exclusion vote expected in November/December. If approved by voters, Lexington could then enter into an agreement with the MSBA, hopefully yielding at least $100 million in state support.
The Town’s decision makers are clearly concerned and want to manage costs. A number of factors are causing concern, including the project’s $662 million estimated price tag (before reimbursement), future inflation, the possible impact of President Trump’s tariffs on costs, and the volatile economic and construction environment. Detailed design and contract bidding will not begin until 2026, so a lot can happen between now and the time construction contracts are finalized.
There is growing sentiment to do as much, as soon as possible, to manage the budget by identifying options in key cost areas. The PBC’s April 4 agenda item entitled “Should the PBC be discussing other agenda topics not currently on SMMA’s Schematic Design Decisions matrix?” only highlighted these concerns. “There could be significant increases hitting us by the next pricing exercise,” suggested Chuck Favazzo, PBC co-Chair and SBC member, at an April PBC meeting. Added Jon Himmel, PBC co-Chair and SBC member, “We have discomfort with the $662 million. What we have done is to put pieces of paper (representing individual elements of the LHS design) in a bag and then we’re going to take each paper out and then cost it beginning on June 4. We need a more holistic approach so cost doesn’t run away.” Lexington purposefully brought Turner Construction onboard during this pre-construction phase because it has the private sector skills to holistically drive down costs.
SMMA, Dore & Whittier, and Lexington’s Department of Public Facilities have tried to allay the fears. This group believes that it has (1) developed a collaborative process with the various Town committees, (2) methodically reviewed each design component, (3) reported back to the SBC that has final authority, and (4) is now proceeding to assemble the “puzzle” to hand off to the cost estimators in early June. Explained Lorraine Finnegan, SMMA’s senior executive on the project, “I think it is important that the PBC and the public understand that we (the project team) talk daily — here’s an option, here’s something we’re looking at. We are asking the questions: can you price this, can you check on this, which option is better for constructability?”
At the April SBC meeting, Joe Pato, SBC and Select Board Member, suggested, “the $662 million number is not yet cast in stone” but he cautioned the group to be very careful to avoid making choices that push it up. Added Chuck Favazzo, “Working to a number now is only going to help us. If we’re waiting, it’s going to be too late.”
The public will have a lot to digest on the cost front as the estimating efforts play out. Here is an overview of the key cost components that will shape the discussions:
- Site Improvements: This category includes site preparation, improvements, and utility work. The subsurface soils underlying the LHS area make for difficult construction: peat and organic materials are present. Ongoing geotechnical work will ascertain construction requirements.
- Sitework: This represents the sub- and superstructure of the building.
- Plumbing & Mechanical: Major categories of cost include HVAC systems, plumbing, and fire protection.
- Electrical: The category includes electrical utilities, including solar generation systems. The mandate is to maximize onsite renewable generation to become net zero.
Lexington may spend more for HVAC and renewable generation due to the Town’s all-electric and net zero requirements. However, multi-year life cycle costs can be lower due to available energy rebates and operating costs savings. Paybacks for higher spending may be short. The team is evaluating multiple options for its energy systems. - Building Envelope: This area includes exterior walls, windows, doors, and roofing.
- Interiors: The category typically contributes a lot to overall costs. It includes interior construction, furnishings and fixed equipment.
- Non-Core Construction: Most of the design for LHS focuses on construction to meet the core educational program, which has been collaboratively shaped by the Town together with MSBA guidelines. The MSBA allows districts to include some non-core construction in projects with no MSBA reimbursement. In Lexington’s case, non-core square feet (sf) include (1) a 48,000 sf addition/renovation to the field house currently estimated at $42.6 million and (2) 20,000 sf for the Central Office (which could be converted to classrooms in the future) at about $23 million. These two spaces total about 10% of the current estimated budget.
- Indirect Construction Costs: This category includes general costs (e.g., project admin, temporary facilities, security), contingencies, budgeted escalation/inflation, overhead and profit, and other indirect costs. The Lexington project team has recently added a line item for “Trump’s tariffs” to this cost bucket. Based on MSBA data, “indirects” make up 25% of direct construction costs. That’s most likely the largest slice of the construction budget. There is a lot of risk in this category: budget “indirects” too low and you may blow the budget, perhaps with actual costs that are out of your control; budget “indirects” conservatively and contractors may be very happy pocketing the higher gross margin.
- Soft Construction Costs: This includes professional service fees (e.g., design, owner’s project manager); furniture, fixtures, equipment/IT; and more contingencies, including a contingency slug that the Town will add to the total. In Massachusetts, soft costs may represent 20% of a total high school project cost. That is a big number.
Stay tuned during the summer as the costs get sliced and diced and then reformed into a project residents will vote on. The next Community Forum is scheduled for Wednesday, May 21 at 6:30 pm.
LexObserver Columnist Gerry Yurkevicz will be providing regular updates and analysis related to the Lexington High School building project.