'Tis the Season To Demolish Holly

Unanswered questions cast a shadow over bidding process for Holly plant demolition

The Holly Street Power Plant, long the bane of residents in the East Austin neighborhood north of Lady Bird Lake, will someday be replaced by a park, but city officials must first settle a row over its demolition.
The Holly Street Power Plant, long the bane of residents in the East Austin neighborhood north of Lady Bird Lake, will someday be replaced by a park, but city officials must first settle a row over its demolition. (Photo by John Anderson)

Even in its shuttered state, the Holly Street Power Plant remains a spark of contention. More than three years after Austin Energy closed the facility to convert the site into a city park, a new debate has emerged over who should demolish the hulking structure that has for decades cast an unwelcome shadow over an East Austin neighborhood north of Lady Bird Lake.

Six environmental contractors bid on the project last summer, and on Dec. 13, the Electric Utility Commis­sion approved, with strong reservations, city staff's recommendation of Connecticut firm TRC Environmental Corp. to demolish the 50-year-old structure and remediate the soil on the 22-acre site. The commissioners' most persistent questions centered on why the No. 2 bidder – Dixie Demo­lition of Birmingham, Ala. – wasn't selected when its $18.7 million bid was roughly $6 million below TRC's (or $8 million with the addition of TRC's 5% contingency fee) and its overall matrix ranking was very nearly tied with TRC's, falling less than a percentage point behind. "Troublesome" and "curious" were the oft-repeated words surrounding the commissioners' discussion.

"We are very disappointed that we weren't selected," Dixie President Claude Hendrickson said. "We were real pleased to participate in the process but curious how a .64 point difference equates to an $8 million difference in cost."

Project manager Rose San Miguel told the commission that TRC's experience and the company's plan of action for Holly proved to be the key selling points. But she explained that because of the sealed-bid process, she wasn't certain what information she could pass on at a public meeting. "Staff at [the Contract and Land Management Department] are very precise," she said of the city's procurement arm for capital projects. "They scrubbed the numbers ... and the numbers resulted in what you see before you."

With one member absent, the commission considered punting the proposal without action, but ultimately approved the recommendation on four votes, with members Steve Taylor and Stephen Smaha abstaining. The commission also agreed to include a red flag with its vote to alert City Council of its concerns. Council is slated to consider the demolition proposal Jan. 13.

One other trouble spot remains. What the commission didn't know at the time it voted was that a competing bidder, California-based CST Environmental – which low-balled the project at $13.8 million – had already filed a complaint with the city over its elimination from the bid process. Accord­ing to the complaint, filed by attorney Thomas Nesbitt, CST had been ranked equal to TRC in financial stability and had scored higher than TRC in reference checks, yet the company wasn't even granted an interview. "CST's failure to be interviewed for the project has never been explained by Austin Energy staff despite repeated requests," Nesbitt wrote in a letter to City Council and the commission.

Nesbitt, who attended the Dec. 13 meeting, said he was flummoxed by the lack of details provided to the commissioners, despite their repeated questions for more information. "I've been to a lot of public meetings," Nes­bitt said, "and it just struck me as very odd." Nesbitt is seeking to have the commission reconsider its vote and has sent a letter to City Council and the commission to inform them of his client's complaint, filed four days before the commission meeting. But CST's complaint stalled out on Tuesday with the city finding "no grounds for a protest hearing," according to a letter to Nesbitt from Rosie Truelove, acting director of Contract and Land Management. Truelove stated that the city only interviewed the top five bidders, and CST ranked sixth, or last.

Nesbitt, meanwhile, says the city is still failing to explain its prompt dismissal of CST from the bid process. "My view is that this is more of the kind of lack of transparency that was apparent at the Dec. 13 meeting," he said.

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Holly Street Power Plan, Holly Street Power Plant, Austin Energy, Electric Utility Commission, TRC Environmental Corp., Dixie Demolition, CST Environmental

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