The Ag Innovation Campus (AIC) will begin construction this summer, and while many things have gone well, soaring construction costs will impact the initial build of the facility.
Project Manager Jim Lambert said the building costs have grown at an unprecedented rate. “We did hit some headwinds with COVID, absolutely,” said Lambert. “COVID has caused us some challenges. As I’m sure most people are aware, building costs are going up at an unprecedented rate, and it’s the same thing with our particular project. We’re seeing cost increases since October in the 40 percent range. Those have leveled off a little bit at this point in time, but they continue to go up, and we really don’t know where they’re going to end. A 40 percent increase in our construction cost has caused us a little extra work, and more concern. But things are still moving ahead. We still have a plan to start earthwork in the June timeframe. We have our equipment being refurbished and expect it will be available for delivery in a June timeframe.”
Those increased costs mean the project will have to be downsized in the early stages. “Other than COVID, things are going along really well,” said Lambert. “COVID has caused us to scale back our original plans to downsize the building some. That’s just a temporary step. As we get through COVID, we’ll be able to fill out the building as we’d originally designed. It will just take a little bit more time than originally planned. We have an original but that was a starting point, but the key is all the costs have gone up 40 percent. No matter what you started with, you have to find 40 percent more to fill in the gap to get where you wanted to be originally. That’s a pretty tough hurdle.”
Lambert told the Crookston Housing and Economic Development Authority Tuesday that the building will initially be scaled back to 65 feet by 250 feet from the full design of 160 x 430. “We’re looking at different options and are now going to build an area for the small mechanical crush, and two industrial incubation bays or rental bays with the building initially,” said Lambert. “That will allow us to get projects started; start developing a little cash flow; and filling in for our mission. As time goes on, we’ll be able to add the remaining nine bays and office building to that AIC facility.”
Lambert said the AIC is working with partners to help with the inflated costs, including an ask of CHEDA and the City of Crookston for assistance. “That’s pretty tough on the limited budget we had,” said Lambert. “We’re trying to do this very frugally and efficiently as possible. That 40 percent really caused a lot of concern around the budget. And that’s one of the reasons we’re scaling the project a little bit small to start with. Those costs are really causing us trouble and we’re looking for support from partners wherever we can find them. We’re talking to our equipment suppliers, to see if they can help us out or what they’d be willing to do. We’ve had some success with a commitment to some equipment for the AIC. One of the areas we’re looking for support would be around the earthwork. The earthwork for the size of the building we’re at now is in the $800,000 range. We’re looking for support from the City of Crookston or the area for roughly half of that to move this project along to build the AIC and develop some more economic development in the Crookston area.”
Lambert said despite soaring costs, the AIC is still progressing toward construction. “Things are going extremely well since our groundbreaking in October,” said Lambert. “We’re moving ahead with the project at a very quick speed. We’re looking at building contractors, earthwork contractors, mechanical, electrical, plumbing, all the steps that go along in developing a project. We have civil engineering work going on right now. Everything is going extremely well, moving along quickly with a lot of momentum and enthusiasm around the project. Working with the City of Crookston and area groups has been wonderful, very pleasant to work with. We’ve had several conversations with the city on the building plan, entitlement work, and things like that.”
The AIC is targeting a late 2021 or early 2022 opening for the initial phase of the facility. “We need to get a building ordered,” said Lambert. “That’s what we’re looking at right now with building contractors. We have to go through the bidding process. Then, we’re thinking we’ll be able to start that in September and get the building erected and equipment moved in. And still, target starting up the fourth quarter of 2021 or first quarter of 2022. One of the wildcards is the delivery time on the steel for the buildings. Some building suppliers are out over six months to get a building delivered. Grain bins are the same thing. If you order a grain bin now, you might see it in September. When we identify the building, we’ll have a better idea of the timeframe.”
All things considered; Lambert said the facility will ultimately look as it was initially designed to. “We have a good plan,” said Lambert. “We have a lot of momentum. The Ag Innovation Campus is going to start out a little differently than we’d planned but we’re still going to have a very nice facility on the corner of Ingersoll and Highway 75 in Crookston. We still plan to do the full buildout; it’s just going to take a little more time. Hopefully, the COVID will slow down so we can see some relief in the price increases. It’s still a great project. The mission and the vision are still very valid today, as they were in the past.”