CYAN MAGENTA YELLOW BLACK 1A LIFE Chelsea Moser makes first-team all-tournament, but Willamina falls in Class 3A title tilt, Page 6B Area art galleries offer variety of items from local artists, as well as perfect gifts for the holiday season, Page 1D TRACTION READY FOR WINTER WWW.LESSCHWAB.COM OR-0000283620 00283620 SPORTS SUNDAY Statesman Journal StatesmanJournal.com SERVING SALEM, KEIZER AND In this installment, reporter Tracy Loew examines the relationships between the people involved with developing Courthouse Square and the project’s controversial past. Next Sunday, the Statesman Journal will take a forward look. Courthouse Square’s public owners and a citizen task force have struggled to find a solution for the dangerous office building and bus mall. Cozy relationships among principal players may have contributed to lax oversight of doomed office space and transit mall Statesman Journal -YEAH DUCKS: Oregon forces five turnovers, rings up 53 points in mashing of undefeated Stanford The Statesman Journal asked local officials this question: “What’s changed?” Former Salem mayor R.G. Andersen-Wyckoff holds part of the ribbon and motions for the bus that will break it to come on through during an opening ceremony at the transit mall on Sept. 29, 2000. STATESMAN JOURNAL FILE BILL CHURCH What do you think should be done with the Courthouse Square block? Solving Courthouse Square will take lots of money and patience, says Executive Editor Bill Church. Let’s all give thanks that the debacle wasn’t worse, Page 17C. Readers are invited to submit letters of up to 200 words for publication on an upcoming Opinion page. Please include your first and last name; town; and, for verification purposes, day and evening phone numbers and home street address. BEAVERS: OSU falls to 2-8 with listless loss against California Courthouse Square is owned by Marion County and the transit district, but the city of Salem approved its flawed plans and issued building permits. Salem officials quoted in an Oct. 2 story said city approval of building plans is not a guarantee that the engineering is correct. There will be no passing of the torch just yet. The University of Oregon football team showed that it was still top Duck in Oregon State wide receiver James Rodgers (right) is the Pac-12 stopped by California defenConference with a sive back Steve Williams during the first quarter Saturday. resounding 53-30 THE ASSOCIATED PRESS victory Saturday against the previously undefeated Cardinal at Stanford Stadium. The win before a national television audience puts Oregon one win away from the Pac-12 North title and the right to host the first Pac-12 title game Dec. 2 at Autzen Stadium. An Aug 14. story showed the red flags officials somehow missed. Bad engineering was far from the only problem at Courthouse Square. Failures in organization and due diligence contributed to the result. See TIES, 3A Readers also may post comments at Facebook.com/StatesmanJournal. Oregon running back LaMichael James (21) celebrates with teammate Rahsaan Vaughn after scoring one of his three touchdowns Saturday against Stanford during the Ducks’ convincing 53-30 victory. THE ASSOCIATED PRESS In July 2010, engineers determined that the entire Courthouse Square complex had severe structural defects and was unsafe to occupy. The project cost taxpayers $34 million. BY TRACY LOEW YOUR TURN Beavers Report: Page 2B Ducks Report: Page 3B Online: For photo galleries go to StatesmanJournal.com/sports. — Michael Rose Online: For more on of Courthouse Square, go to StatesmanJournal.com/square. WEATHER 50° 40° Cloudy with a chance of rain at night. Full report, 18C INDEX Bridge..............11E Business .............1E Classifieds..........4E Comics........INSERT Crossword......2,4D Editorials .........16C From Your Community 2C Horoscope ........4D Lottery ..............1C Nation...............9A Obituaries .......14C Sudoku .............5D TV...............INSERT World..............11A INSIDE TODAY OCCUPY SALEM LOOKS TO MAKE CHANGES For the latest news updates, go to StatesmanJournal.com GRACE GOETZ AND OTHERS LEND A HAND TO HABITAT FOR HUMANITY HOME TODAY’S DEAL – SAVE 50%! $24 for $12 Savings on 2 Exotic Dance Classes at Mid-Valley • Page 1C 26 36 With clear changes imminent for the Occupy Portland movement, some members of the Salem movement headed to Portland as police there were preparing for a possible clash with demonstrators. OR-0000285012 Page 1C A Gannett newspaper © 2011 Printed on recycled paper. Vol. 160, No. 215 Subscriber services: (800) 452-2511 Classified ads: 0 40901 07402 1 (503) 399-6789 OR-0000287918 brought to you by MPG CITY MPG HWY MSRP $17,295 FACTORY REBATE $500 SKYLINE DISCOUNT $796 SALE PRICE $15,999 – $500* $15,499 VIN#251485 1 at this Price. * If Financed Through Ford Motor Credit. The Exotic You get today’s deal online at ★★★ The “Engineered to Fail” investigative series has attempted to answer questions about Courthouse Square, downtown Salem’s infamous landmark. Courthouse Square: Close ties, closed eyes? T $1.50 METRO SALEM AREA $1.75 OUTSIDE THE METRO SALEM AREA ABOUT THIS SERIES FOURTH IN AN INVESTIGATIVE SERIES ABOUT COURTHOUSE SQUARE en years ago, at the same time problems with the newly built Courthouse Square were becoming evident, Marion County Commissioner Randy Franke accepted a series of large campaign donations from the facility’s builder and others connected with the project. Between December 2001 and November 2002 — as cracks appeared in walls, floor tiles buckled and paving stones shifted — those donors contributed about one-quarter of Franke’s total war chest for his losing run, in November 2002, at a seat in the Oregon Senate. Builder Pence/Kelly Construction made six donations, totaling $81,000, making it Franke’s largest campaign donor, campaign finance records show. THE MID-VALLEY November 13, 2011 503-581-2411 ‡SALES ‡SERVICE 503-463-4853 ‡PARTS ‡BODY SHOP Serving Salem/Keizer Since 1962 www.skylineforddirect.com CYAN MAGENTA YELLOW BLACK 2A 2A Statesman Journal ★ Sunday, November 13, 2011 FOURTH IN AN INVESTIGATIVE SERIES ABOUT COURTHOUSE SQUARE Familiar names move on to other projects Many public construction efforts involve key players from the Courthouse Square debacle The Right Floor! The Right Way! BY TRACY LOEW The Right Price! The local public construction community remains close-knit. Indeed many of the names associated with Courthouse Square are connected with other public construction projects around the area: Billy Wasson, the corrections director who took over as Courthouse Square project manager in January 1998, previously was part of a team that had overseen construction of the Brooks garbage burner in 1986. He also was the project manager for the Marion County jail in 1988. That project was delayed more than five months because of problems with the smoke removal system and with bracing devices that hold together the cement blocks. Dan Berrey, Courthouse Square’s original developer, went on to develop a number of area projects, including The Meridian mixed use building. He’s also part of a group that purchased the former site of Boise Cascade in downtown Salem. Luis Caraballo was chairman of the transit board when Courthouse Statesman Journal 425 Pine St. NE, Salem 503-371-7556 • timscarpet.com CCB#32916 OR-0000283645 FREE FRIES & DRINK! 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DAY, OWNER museum_lady@yahoo.com eceteraantiques.com #$ % !" #$ % ' !& !" ! ! & Saturday November 19th • 10-4 • • • • • • Drawings & Door Prizes Mudpie Holiday Baby Showcase Tastings From Gourmet Village 20 Themed Trees Meet Mr. & Mrs. Santa Claus Unique Gifts for Under the Tree D GOL MEDAL OR-0000287676 MADRONA HILLS 503-763-6323 5 03 3 763 3 63 323 706 Madrona Ave. SE Locally Owned & Operated www.MadronaAceHardware.com Square was approved and in 1997 publicly defended the no-bid contracts and bonuses given to project insiders. Caraballo was chosen as facilities director for the Salem-Keizer School District in June 2007, as the district was gearing up to ask voters for what was then the largest school construction bond in state history. He’s now overseeing the $242.1 million project, approved in November 2008. LCG Pence, the successor company of Pence/Kelly, is the builder for two new Salem-Keizer schools — Kalapuya Elementary School and Straub Middle School — with a total construction cost of $55.8 million. Longtime County Commissioner Randy Franke ran for the Marion County Fire District Board in November 2007, as the district was gearing up to ask voters for a $10 million bond to replace vehicles and to improve and expand fire stations. The district has used about $5 million of the bond, • Franke Curtis approved in 2008. Randy Curtis, who was removed as Courthouse Square project manager in December 1997, became president of the Salem Family YMCA, heading its fundraising campaign for a new aquatics center. In November 2004, the YMCA dropped its campaign in order to help the Salvation Army Kroc Center move forward. In October 2005, the Salvation Army then hired Curtis to be project director for the development of its proposed community and aquatic center. LCG Pence was the builder for the $40 million complex, which was completed in September 2009. It’s located on Bill Frey drive. Curtis now lives in Camas, Wash., where he is leading a community effort to develop a new community center. • tloew@StatesmanJournal.com, (503) 399-6779 or follow at twitter.com/SJWatchdog Lots of questions,but very few answers Whether site can be fixed, how much it will cost remain unknowns The Courthouse Square office building and bus mall is jointly owned by Marion County and the transit district. The Statesman Journal talked with John Lattimer, Marion County chief administrative officer; Allan Pollock, general manager of the transit district; and other officials to get the basics on the issues the agencies must solve. Question: Can Courthouse Square be repaired? Answer: Whether it’s practical to attempt repairs remains unresolved issue. Engineering reports indicate that repairs are possible for the office building, although high costs could take that option off the table. The prospects for fixing the transit mall and underground parking garage portion of Courthouse Square, which have some of the worst structural problems, are more iffy. One group of consulting engineers suggested a remediation plan that would cost about $53.4 million. A subcommittee of a citizen task force maintains repairs can be done for much less, perhaps $16 million. Marion County and the transit district have hired an “owner’s representative,” who will draft a request for proposal, or RFP, seeking companies with ideas for repairing Courthouse Square. When the responses come back, officials should have a better understanding of repair options and costs. Q: How much money are the agencies prepared to spend on repairs? A: That’s another unknown at this point. The county and transit district have a “condominium agreement” that outlines each parties responsibilities for the jointly-owned Courthouse Square. If the damage to the property is less than 75 percent of its value, the agreement specifies that repairs should be made. Not long ago, the building Today, panels of chain-link fencing surround the Courthouse Square site in downtown Salem. DANIELLE PETERSON / STATESMAN JOURNAL and transit station alone had a real market value of about $36.6 million, according to the Marion County Assessor. That would potentially mean repairs would be required for up to $26 million in damage under one interpretation of the legal agreement. But there are caveats in the agreement and Courthouse Square’s owners can agree to change its language. With its defects known, Courthouse Square is worth a lot less now. A report by assessor’s office placed the current value at about $8.6 million. The estimate included a little more than $3.4 million for the land and roughly $5.1 million for the underground parking and other ground floor improvements. Q: Are there other alternatives for the property? A: While Courthouse Square’s owners are taking proposals for remediation, other options haven’t been ruled out: such as selling the property to a private owner and reconfiguring the entire city block. There could have a second round of RFPs seeking suggestions for redevelopment. At this stage, the Marion County Board of Commissioners is divided on how to proceed. Commissioners Janet Carlson and Patti Milne said they wanted to see more than just repair options. Commissioner Sam Brentano said he preferred fixing Courthouse Square — if that can be done at the right price. Transit district officials have said Courthouse Home Delivery 4th Annual Open House Caraballo Statesman Journal • Early English Cottage Berrey BY MICHAEL ROSE (CA1822) Wasson STARTING A SUBSCRIPTION OR FOR CUSTOMER SERVICE Customer service when you need us: Fast, automated service available 24 hours a day, 7 days a week (toll-free): 800-452-2511. Personal, dependable delivery and billing service: Our representatives are here to serve you 8 am-5 pm on Monday, 10 am5 pm Tuesday-Friday, 7 am -10 pm Sundays and holidays. (closed Saturdays) Your newspaper should arrive by 5:30 a.m. in the Salem-Keizer area (6 a.m. in other areas) and by 6:30 a.m. on weekends and holidays. MISSING YOUR NEWSPAPER? 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Jerry Thompson, president of the transit district’s board of directors, said he was optimistic about the chances for cost-effective repairs. In any case, Courthouse Square can’t be mothballed indefinitely. The building and bus mall have been declared dangerous structures by the city. They will eventually have to be made safe or demolished. Q: Have any private developers inquired about the site? A: Only one developer has made inquires to the county and transit district. Chuck Sides, the local developer best known for the Keizer Station shopping center project, submitted a letter to the Marion County Board of Commissioners in October 2010 suggesting that private “risk takers” should partner with the county to solve the Courthouse Square problem. In a recent interview with the Statesman Journal, Sides said he followed up with a few preliminary discussions with the county and transit district officials. The developer said he wouldn’t make an offer on the property unless officials invited him to do so. Q: What about Courthouse Square’s property insurance? A: Courthouse Square is Statesman Journal StatesmanJournal.com Independence Day, Labor Day, Veteran’s Day, Thanksgiving Day, Christmas Eve, and Christmas Day. IN-OREGON MAIL DELIVERY Weekly rates: Daily and Sunday: $11.95 Monday-Saturday: $7.66 Mail subscriptions not available in areas served by carrier delivery. Mail delivery rates outside Oregon available on request. East Valley Edition: Wednesday only: $30/$38 Per year • • • HOW TO PAY The Statesman Journal accepts Visa, MasterCard, American Express and Discover card. For added convenience, we offer EZ Pay (monthly credit-card or checking account debiting). Placing Advertisements CLASSIFIEDS Phone: (503) 399-6789 Hours: 8 a.m. to 5 p.m. Monday-Friday Online: StatesmanJournal.com OBITUARIES Phone: (503) 399-6791 Hours: 9 a.m. to 4 p.m. Monday-Friday OTHER ADS Phone: (503) 399-6602 Hours: 8 a.m. to 5 p.m. Monday-Friday Job Openings Phone: (503) 399-6680 Online: www.StatesmanJournal.com/jobs General Information Published daily by the Statesman Journal Co. Inc., a subsidiary of the Gannett Co. Inc. Street address: 280 Church St. NE Salem, OR 97301 Mailing address: P.O. Box 13009 Salem, OR 97309-3009 Phone: (503) 399-6611 or (800) 556-3975 Business hours: 8 a.m. to 5 p.m. Monday-Friday Publication Number: ISSN 0739-5507 Postmaster: Send address changes to the Statesman Journal, P.O. Box 13009 Salem, OR 973093009. Periodical postage paid at Salem, Oregon. Printed using eco-friendly soy ink on 35 percent recycled newsprint. Administration President and Publisher: Steve Silberman, (503) 399-6689; ssilberman@StatesmanJournal.com Director of Advertising and Marketing: Al Bonner, (503) 399-6648; albonner@StatesmanJournal.com Executive Editor: Bill Church, (503) 399-6712; bchurch@StatesmanJournal.com covered by a $29 million insurance policy, but the insurance company, Affiliated FM, hasn’t yet determined if its owners have a valid claim. The insurance policy on Courthouse Square specifically excludes coverage for construction defects — unless they give rise to a “covered peril.” A building collapse would be a covered peril under the insurance policy. As bad as Courthouse Square might be, no portion of it has actually collapsed. Engineers hired by the insurance company have run additional tests on the building. The question of paying, or denying, the insurance claim could end up in court. County and transit district officials said they haven’t given up hope that insurance company will pay the claim without protracted litigation. The county, however, has retained an attorney who specializes in representing policy holders in insurance matters. Q: Why has so little money been recovered in lawsuits against Courthouse Square’s builders and designers? A: Money recovered to date from lawsuits — about $1.8 million — won’t go far in solving the Courthouse Square problem. Settlement amounts from designers and contractors have been driven, in large part, by insurance policies that crimp the potential recovery in a lawsuit. The “wasting” or “burning” policies meant every dollar spent on defense and settlement costs would mean a dollar less to recover. Litigation against Century West Engineering, the firm that employed the project’s structural engineer, is unresolved, but it too has the same type of “wasting policy.” Q: How much money is owed on Courthouse Square? A: Financial obligations to bondholders will continue at about $1.5 million per year through June 2023. mrose@StatesmanJournal.com or (503) 399-6657 or follow on Twitter at mrose_SJ. News Tips Breaking news: (503) 399-6773 Local news, Weekend: Michelle Maxwell, (503) 589-6930 or mmaxwell@ StatesmanJournal.com Mid-Valley, Communities, Business: Don Currie, (503) 399-6677 or dcurrie@ StatesmanJournal.com Community weeklies: Carol McAlice Currie, (503) 399-6746 or ccurrie@ StatesmanJournal.com Opinion: Dick Hughes, (503) 399-6727 or dhughes@ StatesmanJournal.com Photo: Diane Stevenson, (503) 399-6605 or dstevens@ StatesmanJournal.com State: Dan Bender, (503) 399-6731 or dbender@ StatesmanJournal.com Sports: James Day, (503) 399-6700 or sports@ StatesmanJournal.com Real Living: Heather Rayhorn, (503) 589-6920 or hrayhorn@ StatesmanJournal.com CYAN MAGENTA YELLOW BLACK 3A ★ Statesman Journal 3A Sunday, November 13, 2011 FOURTH IN AN INVESTIGATIVE SERIES ABOUT COURTHOUSE SQUARE TIMELINE Ties 1986: Billy Wasson is part of a county staff team that works on the construction of the Ogden Martin Waste-to-Energy burner in Brooks. Continued from 1A Other donations ranged from $2,000 from Curt Pence Investments, owned by Pence/Kelly’s president, to $100 from Kim Arbuckle, then-president of project architect Arbuckle Costic. Franke, who was deeply involved with the project, says the donations weren’t meant to and didn’t influence reaction to initial problems at the facility, which were played down as cosmetic. “I ask a lot of people for contributions when I’m running for office. I don’t always ask why they give them. When I left county service in January of 2003, as far as I knew everything had been working fine,” Franke said of the downtown Salem office and transit complex. Ron Bersin, leader of Oregon’s ethics commission, said such donations wouldn’t run afoul of Oregon’s ethics law because campaign contributions are specifically excluded from the statute. The Secretary of State’s office, which oversees campaign finance, said no election laws prohibit such donations. But some observers say the campaign boost is an example of overly close relationships among the region’s building industry and government officials — ties that can result in the kind of lax oversight that doomed Courthouse Square. Franke is just one of the public figures involved in Courthouse Square who had connections to prominent developers and contractors. Indeed, Golder Associates, a consultant the county and transit district hired to figure out what went wrong with the building, noted in its May 2011 analysis that “… a rigorous process of competition and qualification based review of credentials was left out of the process.” The $34 million project, which opened in September 2000, was evacuated and declared dangerous last year. Consultants estimate it could cost as much as $49 million to fix it. Who benefited? Courthouse Square is a joint project between Marion County and Salem-Keizer Transit. It originally was billed as a public-private partnership that would provide new county offices and a new bus depot while revitalizing downtown Salem. By 1997, the private money had not materialized, leaving government to fund the entire complex. The project had been scaled down, with an entire side eliminated. And the cost had risen. In November of that year, development of the facility came to a halt after the Statesman Journal published an investigation showing that, while not illegal, four insiders had benefited from the project. Now, a new Statesman Journal examination shows that that trend continued throughout the project’s construction. And Courthouse Square insiders continue to play roles in major developments around the area. Among insiders who benefited: Developer Dan Berrey sat on the transit board and was among those supporting a new facility. Berrey resigned from the board in May 1996, the day after he submitted a proposal to develop the project. His proposal was chosen later that month, even though it was the more expensive of the two submitted. Berrey stood to make up to $1.3 million from the project, the Statesman Journal reported at the time. In June 1997, despite nothing having been built, the county and transit board paid $300,000 to buy Berrey out following a dispute about his fees, which had never been put in writing. He also received $22,863 to negotiate the purchase of several privately owned buildings on the Courthouse Square site. •Realtor Bill Frey sat on the transit board and chaired the committee that studied sites for the project in 1995. At the same time, Frey was the listing agent on one of the properties the county ended up buying to make way for the project, earning a commission of about $6,200. In August 1997, about a month after his term on the transit board expired, Frey was hired in a no-bid process as the leasing agent for the • 1988: Billy Wasson oversees construction of a $16.3 million 255-bed Marion County Jail on Aumsville Highway. Oct. 1, 1988: Opening of the new Marion County Jail is delayed until March 1989 because of construction problems. 1991: Salem businessman R.G. Andersen-Wyckoff becomes Salem mayor, serving two two-year terms. July 1995: Realtor Bill Frey and Developer Dan Berrey, along with the rest of the transit board, ask AndersenWyckoff to become the transit district’s general manager. August 1995: Bill Frey leads a committee considering locations for a new transit mall. Listening to changes in the hierarchy of the Courthouse Square project team announced at a Dec. 3, 1997, commissioner's meeting are (from left) R.G. Andersen-Wyckoff, Salem Area Mass Transit District; Billy Wasson, new project director for Marion County; Larry Oglesby, new member of the county’s team; and Randy Curtis, former county project director. STATESMAN JOURNAL FILE FRANKE DONATIONS Between December 2001 and November 2002, a number of people and companies associated with Courthouse Square’s construction showered Marion County Commissioner Randy Franke with campaign donations for his losing run at a seat in the Oregon Senate: Courthouse Square builder •Pence/Kelly made six donations, totaling $81,000. Bob Hill, who was Pence/Kelly’s chief financial officer at the time, said he believes the amount was for Franke’s use of a vacant office building owned by then-Pence/Kelly president Curt Pence. Curt Pence Investments, •owned by Curt Pence, contributed $2,000. Pence did not respond to a request for an interview. River Bend Sand & Gravel, •which supplied concrete for the project, gave $1,500. Company officials did not return phone calls. Mark Development •Co.,Melvin Courthouse Square’s developer/project manager, contributed $1,500. Company officials could not be reached for comment. Kim Arbuckle, president of •project architect Arbuckle Costic, contributed $100. Arbuckle said he had been contributing to Franke’s campaigns for years. private offices in Courthouse Square. His 6 percent commission could have brought him as much as $82,000. Frey quit the job following controversy about the deal. He died in July 2002. In July 1995, Frey and Berrey, along with the rest of the transit board, asked former Salem businessman and two-term mayor R.G. Andersen-Wyckoff to become the transit district’s general manager, even though he had no transit experience. At the time, then-transit board chairman Luis Caraballo said the board was looking for someone who could make the long-discussed transit facility a reality. Andersen-Wyckoff is credited with the conception and design of Courthouse Square, and the bus mall bears his name. A year after his hire, Andersen-Wyckoff received a 23 percent raise, from $65,000 to $80,000 per year. The following year he received a $4,000 bonus tied to his work on Courthouse Square. In February 1999, two days after the construction bid was awarded to Pence/Kelly Construction, Andersen-Wyckoff resigned to become general manager of the Recreation Centers of Sun City West in Arizona. Andersen-Wyckoff did not respond to messages left at his home in Georgetown, Texas. In October 1996, Randy Curtis, the county’s general services manager, received a raise of about $600 per month, or 10 percent, for the duration of the Courthouse Square project, for serving as the project manager. He already was among the county’s highest-paid employees. The practice was unusual among area government bodies, the Statesman Journal reported at the time, citing policies at the state of Oregon, city of Salem, SalemKeizer School District and Western Oregon University. But Curtis defended it, saying he was accountable for the success or failure of the project. “You are a hero if you make it and a scapegoat if • • you don’t, and $600 a month isn’t a whole lot of compensation for that kind of risk,” he said at the time. Curtis was replaced as project manager in December 1997, but kept his county job. In April 1998 he was demoted and his salary was reduced, but he continued to provide advice on the Courthouse Square project until at least January 2000, according to county meeting records. He resigned from the county in September 2000. In an August interview, Curtis said he was involved only in the early stages of the project. “I had no significant role overseeing the project when it was under construction,” he said. “I think it’s a tragedy.” Marion County Corrections director Billy Wasson was appointed to replace Curtis as project manager of Courthouse Square in January 1998. He retired from the county at the end of that year, but continued as project manager for at least two more years. In a September interview, Wasson said that after his retirement he was put back on the county payroll as a temporary hire earning $40 per hour. Because he also was collecting his pension, state law limited him to working 20 hours per week, he said. In February 1999 Pence/Kelly won the contract to build Courthouse Square with a bid of $17.2 million. By law, the county and transit district had to choose the lowest of the six qualified bidders. A month later, the company signed a contract with the county and transit district that included additional work, for $18.5 million. Pence/Kelly’s final contract amount, following 26 contract amendments, was $20.9 million, an increase of 22 percent from the company’s bid and 13 percent from the original contract. The total project came in $4 million over the original budget but 20 percent smaller than the first design. Bob Hill was Pence/Kelly’s chief financial officer at the time. He now works for LCG Pence, the successor company to Pence/Kelly. Hill said the change orders were not out of the ordinary for such a project. “Just about any project will have change orders,” he said. “As you’re doing the work the owners see something and they wish to have it changed.” In May 2001, a group of investors that included four owners of Pence/Kelly Construction bought the county’s old administration building, the Franklin Building at State and High streets, for $925,000 in a private negotiation. It was appraised at $1.1 million. Local real estate estate agent Rodney Stubbs filed a formal protest about the process used to secure a buyer, saying he had someone willing to pay more than $1 million. County officials responded that the process was legal. The deal closed in August 2001; the partnership immediately resold the building to developer Chuck Sides for the same price. Sides was Stubbs’ buyer and originally had offered the county $1.05 million for the building. Realtor Bill Frey, the former transit board member, represented Sides in the final deal, Stubbs said. Frey and Sides had worked closely on other deals, including the Keizer Station retail center and the former Morrow Snowboards build- • • • ing, which Sides purchased and then leased to Willamette Education Service District. Frey’s son-in-law, Neil Morrow, owned the company that owned the building. Frey and Sides also were partners in the construction of a state building, along with Frey’s brother, Phil Frey, a longtime Willamette ESD board member. In July 2003, former county administrator Melinda Carlton filed a lawsuit in federal court against the county alleging whistleblower retaliation. She said in her suit that she had repeatedly questioned circumstances surrounding the sale of the county’s old building. The county later settled with Carlton for $70,000. She could not be reached for comment. Construction connections Contracting based on connections or reputation, rather than pricing and qualifications, is the norm in Marion County, some insiders say. Take the case of one of the county’s most recent construction projects, says longtime Salem contractor Tom Dalke: The county wanted to construct a six-bay insulated truck and heavy equipment storage building to house deicing equipment through the winter months at the public works department’s Woodburn office. In February, county staff asked commissioners for an exemption to the county’s public contracting rules, allowing it to use an alternative process for scoring bidders based on points assigned by a selection panel, rather than a low bid process. The county received nine bids and determined that six met its requirements. Those bids ranged from $148,000 to $259,000, county officials said. The selection panel — made up of four public works employees — chose Woodburn-based Nomarco Inc., with a bid of $188,750, o r 28 percent more than the lowest bid. “It’s just a slab and a metal building. Anybody could have probably built it. They could not explain to my satisfaction how they could justify spending $39,000 to hire one contractor over another for such a simple project,” Dalke said. In May, commissioners approved a contract with Nomarco Inc. for up to $211,400, which included a 12 percent contingency. The building currently is under construction. “It’s about an abusive and ridiculous a way of government waste and spending money as I’ve ever seen, and I’ve been a contractor my whole life in Salem,” Dalke said. County Commissioner Janet Carlson said she couldn’t remember the justification for going with a more expensive bid. She said she relies on public works staff to have the expertise to make that call. County contracts analyst Peggy Mitchell said that factors such as the contractor’s experience and capacity to deliver the project also played into the decision. The county and transit district held a public hearings last week on requests to use a similar “alternative procurement process” for services to repair Courthouse Square. tloew@StatesmanJournal.com, (503) 399-6779 or follow at twitter.com/SJWatchdog November 1995: The Courthouse Square plan is unveiled. The county and transit board say they are seeking a private developer who will finance construction of the project in return for three stories of office and retail space to lease to the city and county. May 1, 1996: Two private developers submit proposals for the project: SABA Investments of Vancouver, B.C., and Prudential Real Estate Professionals of Salem. Dan Berrey is lead developer on the Prudential team, with architect Arbuckle Costic and contractor Pence/Kelly. May 2, 1996: Dan Berrey resigns from the transit board. May 22, 1996: A selection committee votes 5-2 to give the contract to the Prudential team, citing its all-local makeup. July 1, 1996: Andersen-Wyckoff receives a 23 percent raise. October 1996: Randy Curtis, the county’s general services manager, receives a raise of about $600 per month for serving as Courthouse Square project manager. June 1997: County and transit board pay $300,000 to buy Dan Berrey out, following a dispute about his fees, which had never been put in writing. Summer 1997: Andersen-Wyckoff receives a $4,000 bonus tied to his work on Courthouse Square. June 30, 1997: Bill Frey’s term on the transit board expires. August 1997: Bill Frey is hired in a no-bid process as the leasing agent for the private offices in Courthouse Square. He resigns from that position before the end of the year. November 1997: The Statesman Journal publishes an investigative report about the Courthouse Square project. Transit board chairman Luis Caraballo defends no-bid contracts and bonuses given to project insiders. December 1997: The Salem Area Chamber of Commerce issues a report critical of the project and calling for new leadership. The project comes to a halt. December 1997: Randy Curtis is removed as the county’s Courthouse Square project manager but keeps his county job and continues to provide advice on the project. January 1998: Billy Wasson takes over as the county’s Courthouse Square project manager. Dec. 31, 1998: Billy Wasson retires from the county, but remains as Courthouse Square project manager, working on a temporary contract paying $40 per hour. Jan. 4, 1999: The project, estimated at $34 million, opens for bids. Feb. 11, 1999: Construction bid awarded to Pence/Kelly for $18.6 million. Feb. 19, 1999: Andersen-Wyckoff resigns to become general manager of the Recreation Centers of Sun City West in Arizona. Oct. 3, 1999: Luis Caraballo resigns as president of the mass transit board after eight years. September 2000: Randy Curtis resigns from the county. Sept. 29, 2000: Courthouse Square is officially dedicated. May 2001: EcoWest Development LLC purchases the county’s former building for $925,000. The newly formed group of investors includes four owners of Pence/Kelly Construction. Another Realtor files a formal protest, saying he has a buyer willing to offer more than $1 million. Dec. 31, 2001: River Bend Sand & Gravel, which supplied the concrete for the Courthouse Square Project, contributes $1,500 to Randy Franke’s campaign for a seat in the Oregon Senate. 2002: Problems with the facility become apparent but are downplayed as cosmetic. Occupants notice interior wall cracks and loose bathroom tiles. Paving stones at the bus mall also are shifting and settling. Jan. 4, 2002: Kim Arbuckle, then-president of project architect Arbuckle Costic, contributes $100 toward Randy Franke’s Senate campaign. Feb. 22, 2002: Curt Pence Investments, owned by Pence/Kelly’s then-president Curt Pence, contributes $1,000 toward Franke’s campaign. March 4, 2002: Pence/Kelly Construction contributes $9,000 toward Randy Franke’s Senate campaign. April 5, 2002: Pence/Kelly contributes another $9,000 toward Randy Franke’s Senate campaign. May 6, 2002: Pence/Kelly contributes another $9,000 toward Randy Franke’s Senate campaign. July 10, 2002: Bill Frey dies at 58 after a battle with cancer that started the previous fall. Sept. 19, 2002: Pence/Kelly contributes another $36,000 toward Randy Franke’s Senate campaign. Oct. 14, 2002: Melvin Mark Development Co. contributes $1,000 toward Randy Franke’s Senate campaign. Oct. 31, 2002: Curt Pence Investments contributes another $1,000 toward Randy Franke’s Senate campaign, bringing its total donation to $2,000. Nov. 5, 2002: Pence/Kelly contributes another $9,000 toward Randy Franke’s Senate campaign, bringing its total to $81,000 (one $9,000 donation was recorded without a date). Franke loses the election to Peter Courtney. November 2002: Pence/Kelly Construction partners with LCG Co. to create LCG Pence general contractors. Jan. 6, 2003: Randy Franke’s term as commissioner ends. Oct. 16, 2005: Randy Curtis is hired as project director for development of the proposed Salvation Army Kroc Center. November 2006: Marion County and the Salem Area Mass Transit District sue the primary contractors involved with designing and constructing the building and transit mall, including Arbuckle Costic Architects and Pence/Kelly Construction. June 2007: Luis Caraballo is chosen as facilities director for the Salem-Keizer School District. July 2010: The Courthouse Square office building is declared a dangerous structure and plans are made to move all occupants out within 60 days. May 2011: Golder Associates issues a report on what went wrong at the facility.