Update 1 - November 30th, 2004

Since issuing its November 7, 2004 Genesee Theatre Report, TOWN has come into possession of additional information and documents from sources outside the city government who have approached us. This new information causes us to update our initial report and to pose new questions that need to be answered by Waukegan officials.

It now appears that the GSI contract that the city government entered into on July 31, 2001—calling for a fast-tracked, two-stage project to be completed by November 1, 2002—was soon altered. This is perhaps foreshadowed in the rider to this contract, which contemplates the extension of GSI’s services to December 1, 2003, while failing to amend the November 1, 2002 completion date in the body of the contract and in the project schedule. Since TOWN received no other changes to the GSI contract in the paperwork provided by the city government, we remain uncertain as to how a two-stage project turned into a four-stage project, obviously creating considerable delay.

It also now appears that the first Pickus contract entered into by the Waukegan city government on August 12, 2002—the only general construction contract for the project in existence until April 19, 2004—covered only about one-half of the necessary renovation work. The completion of this contract (referred to in the bid package as Phase 3) would still have left a large amount of work to be bid out, contracted for, undertaken, and completed before the Genesee Theatre would have become functional. So here we have a theatre that was going to open on Christmas of 2002, then in the summer of 2003, then on Christmas of 2003, then in the spring of 2004, then finally on December 3, 2004, not even under contract to be fully renovated until mid-April of 2004, when the second Pickus contract was signed.

A host of questions arise from this rather strange scenario:

Why, when this multimillion-dollar project was already substantially delayed, would the city government bid out only half of the renovation work, leaving a huge open end that would have to be addressed later in a greatly compressed timeframe?

Once a contractor came in with all of his personnel and equipment and began performing the first half of the job, would it not become virtually impossible to bid out the second half and hire a new contractor to finish the job, especially if the project fell further behind schedule with a long-awaited opening date looming on the horizon and bond payments becoming due?

Would not this pressing dilemma compel the city government to pony up and pay whatever the current contractor demanded to finish the job (Phase 4), since a new competitive bidding process would likely again delay the theatre’s opening and exhaust the public’s patience already worn thin?

Did all of this not create "a perfect storm" of desperation and confusion, resulting in the sudden, unexplained public announcement on November 3, 2003 of a massive cost overrun and the immediate authorization by the city government of a no-bid Phase 4 contract at well over twice the initial projected cost?

Did not this "perfect storm" then spin off the furious blame game that quickly ensued, as the various players in the project began pointing fingers at each other for causing Waukegan taxpayers to shoulder many millions of dollars of additional, "unanticipated" debt?

We put the word "unanticipated" in quotes in light of a copy of a letter we recently received, apparently written by Ray Vukovich to GSI, indicating that he had been informed of an impending $10,000,000 overrun on the Genesee Theatre project and demanding an explanation. The date of this letter is April 30, 2003, half a year before an $8,000,000 overrun was first disclosed to the public and press at the November 3, 2003 City Council meeting. Indeed, in a News Sun article of June 20, 2003 concerning the abrupt termination of GSI, Mr. Vukovich assured us that "delays have yet to put the project over budget."

Also of interest is a copy of another letter dated July 30, 2003, some 3 months before an overrun was disclosed, in which Pickus Construction made an offer to Mayor Hyde to complete the Genesee Theatre renovation for "the Guaranteed Maximum Price at this time" of $10,200,000 (cc: Ray Vukovich and Friends of the Genesee). Somehow, this completion cost grew by 3 million dollars to $13,156,533 on November 3, 2003, when the second Pickus contract was authorized by the City Council and belatedly put into writing 5½ months later, after TOWN made its first FOIA request.

At this point, we cannot explain these letters and their backgrounds or how they played into prior and subsequent events, but such explanations are in order from Mr. Vukovich and Mayor Hyde. Gentlemen, let's end the stonewalling, shoot-the-messenger tactics being used to try to fend off this TOWN investigation. The taxpayers of Waukegan demand straight answers now. The grand opening of the theatre is a milestone, and we have waited a long time for it, but these questions will not go away.

More than ever, we must have a full accounting and audit, a formal investigation, of every taxpayer dollar that has gone into and out of this project from its inception to its completion, which includes a combined 2-1/2 million in state and federal funds. More updates may follow, and more questions may be asked, as TOWN continues to receive and review new information from sources outside the city government.