The Watchdogs: Tab for Jones College Prep could reach $127 million

At $114 million, Jones College Prep already is the most expensive public high school ever built in Chicago.

And a dispute with Walsh Construction — a clout-heavy contractor whose City Hall connections stretch back to the late Mayor Richard J. Daley — could drive the final pricetag for the South Loop school even higher, to $127 million, records show.

Last summer, the Public Building Commission of Chicago rejected two bills totaling $13 million submitted by Walsh, the general contractor on the project, for cost overruns.

Now, the commission — the government agency headed by Mayor Rahm Emanuel that oversees construction of schools, police stations and other municipal buildings in Chicago — is bracing for a court fight.

Commission officials won’t discuss details of the dispute, citing “the potential litigation or liability insurance claims.”

But Molly Sullivan, a spokeswoman for the agency, says the additional bills “relate to the designs of the steel structure of the school and the schedule acceleration required to complete the project on time.”

The new Jones school, which opened last year, originally was expected to cost about $75 million, according to a former Public Building Commission official who says the tab to build the high-rise school at 700 S. State St. escalated because of rising costs for an underground parking garage for faculty and additional structural reinforcement needed for the swimming pool that was put in on the top floor of the seven-story building.

Walsh did not return messages.

A Chicago Public Schools spokesman says the downtown location and underground parking were among the factors that made the school costlier than other recently built high schools.

“It should be noted that Jones is unlike other CPS prototype high schools and is located in the Loop,” says Bill McCaffrey, a schools spokesman. “Jones is a high-rise, has a 500-seat auditorium and underground parking. The site is located on a tight urban parcel immediately adjacent to the CTA Red Line.”

Jones is a selective-enrollment school whose 1,200 students are chosen based on test scores. Formerly located a block north, the new Jones was built on the former site of the Pacific Garden Mission, which City Hall helped relocate to accommodate a bigger high school in the fast-growing South Loop.

CPS and the Public Building commission initially were planning to raze the old Jones school when they built the new one.

In the summer of 2011, they estimated the total cost would be nearly $124 million, according to McCaffrey. Then they scaled back the project, deciding not to demolish the old school. That lowered the estimated cost to $114.6 million — the pricetag until Walsh put in the additional bills.

To pay for the new school, City Hall tapped tax revenues from the South Loop tax-increment financing district.

If the city has to pay the additional $13 million Walsh is seeking, the added bill would most likely be covered by insurance, according to a source.

City Hall paid the Public Building Commission $2.6 million to oversee the Jones school construction project. The commission hired Walsh as general contractor under a base construction contract for $88.1 million. On top of that, Walsh has submitted dozens of additional claims, most of which have been settled.

After rejecting the two biggest claims, the Public Building Commission has boosted its budget for legal fees, bracing for a lawsuit from Walsh, according to a four-page letter that Paul Spieles, the agency’s chief development officer, sent last January to Patricia Taylor, chief operating officer for the Chicago Board of Education.

“PBC determined that Walsh was entitled to compensation for only a fraction of the costs claimed,” Spieles wrote. “We see no basis for recommending that PBC or CPS settle this matter through negotiations for an amount in excess of $2 million.”

In the letter, Spieles also laid out a “worst-case scenario,” saying that “would be litigation by Walsh resulting in judgment in Walsh’s favor.”