Special Assessment Project Status - March 12, 2025
Report for Bay Scene Annual Meeting — 12 March 2025
SPECIAL ASSESSMENT PROJECT STATUS (as of MARCH 1, 2025)
1. PODIUM SLAB STRUCTURAL REPAIRS ($670,000 Special Assessment Budget)
Structural repair work was successfully completed in late July 2023, prior to the approval of the Special Assessment. The importance of maintaining Bay Scene’s structural integrity necessitated that the schedule for these repairs be accelerated. In addition, there was a need to expedite repair of structural problems so homeowners could obtain financing to pay their share of the Special Assessment.
Structural repairs were completed at a cost of approximately $537,000, nearly $133,000 under budget. Because of the accelerated schedule, the repairs were paid out of Bay Scene’s Reserve Funds, freeing the budgeted amount of $670,000 for use on other Special Assessment projects.
2. WINDOW CURTAIN WALL REPLACEMENT ($8,000,000 Special Assessment Budget)
A contract for $7,700,000 with Nautilus General Contractors (Nautilus) was signed 15 April 2024 to procure and install new curtain wall windows. The negotiation and consummation of this contract was expedited to lock-in current material and labor costs and avoid price inflation.
There are a total of 35 five-story locations where windows are being replaced, and extensive preparatory work has been completed at all 35. This work – which constitutes about 15% of the total project - includes excavation, stucco removal, waterproofing, and fastening of steel support beams at the base of each location.
As of 1 March 2025, new windows have been installed in eight locations along the bayside of Towers 1 and 2 and two locations on the north side of Tower 3. Scaffolding has either been removed or is scheduled to be removed soon from these sites. In addition, the original windows have been removed, and new windows are in the process of being installed at six other locations along the north side of Towers 3 and 4. Overall, window curtain wall replacement is estimated to be 35% complete.
An outside fenestration testing firm was retained to test a single floor at each of three curtain wall locations with new windows. However, when leaks were discovered after a recent heavy rainstorm, leak testing is now being performed by the construction team at ALL locations.
To date, we have spent approximately $5,120,000 on purchasing new curtain wall windows, preparing each of the 35 locations, and replacing windows at 10 locations. Included in this $5.12M are unbudgeted costs of approximately $112,000 to extend the new window warranty from 10 to 20 years, and $43,000 in change orders to resolve unforeseen conditions found during construction.
Moving forward, the lessons learned in installing the initial windows should make subsequent installations faster and less expensive. However, it is prudent to expect that additional unforeseen conditions will be encountered. With the extended window warranty, change orders, and need for further remediation of unforeseen conditions, we anticipate the window replacement project will exceed the $8m budget by approximately $270,000.
3. GARAGE/CATACOMB WATERPROOFING REPLACEMENT ($5,000,000 Special Assessment Budget)
This project includes repairs to the waterproofing on the parking structure podium slab and exterior catacomb walls, plus restoration of the landscaping, walkways, and other features aected by waterproofing excavation.
Waterproofing
Construction documents for waterproofing repairs and site restoration were prepared and submitted for review by the City of San Diego in mid-February 2025. The City has indicated that their review and building permit approval process will require six to nine months.
To date, the cost for preparation of the construction documents and building permit application is $34,000, and just over $4,000,000 has been budgeted for the actual waterproofing repairs.
Completing the waterproofing within the specified budget will be complicated by the presence of Bay Scene’s lobby building. A recent survey of this structure showed it to be near the end of its useful life. While there is no imminent danger of structural failure, its deteriorated condition will make waterproofing excavation in its vicinity more challenging and potentially more expensive.
Water leaks recently discovered in our clubhouse ceiling and below the garage entry ramp need to be addressed, and such repairs can be completed at a much lower cost if done concurrently with the planned waterproofing work. Nautilus has provided an estimate of approximately $203,000 for this work.
Site Restoration/Renovation
The need to excavate a significant portion of Bay Scene for waterproofing repairs provides a unique opportunity to upgrade our property to meet 21st century design and standards. To help guide site restoration planning, a steering committee was formed in August 2023 to, along with the Board of Directors, participate in the preparation of a long-term master plan for the property. The resulting Conceptual Master Plan was presented to Bay Scene homeowners on May 15, 2024, and included such upgrades as disabled access ramps to the pool deck and the clubhouse, reconfiguring walkways to eliminate stairs, enhanced water and landscaping features, visual and accessibility enhancement at Bay Scene’s entry, security improvements, etc.
Under the Special Assessment, a total of $865,000 has been budgeted for site restoration, and includes funds for the construction of a foundation drainage system, replacing excavated soil, and returning landscaping and walkways to pre-construction conditions. The budgeted amount, however, does not include funding for the extensive site upgrades contemplated in the Master Plan, nor for the importation of soil needed to bring the site to finish grade. The estimated cost for these upgrades is $1,200,000.
4. CATACOMB PLUMBING REPAIRS ($500,000 Special Assessment Budget)
Construction documents for upgrading the plumbing in our catacombs to meet the current building code have been completed at a cost of $15,000. Nautilus has estimated that these improvements could be implemented for approximately $485,000. Following discussions with Bay Scene’s preferred plumber – High Quality Plumbing – and our on-site building engineer, we feel the specified work can be accomplished for approximately $375,000.
Also included in this Special Assessment project is the upgrading of “two to four” of our 10 catacomb entry wells, and the provision of catacomb lighting.
Excavation for the waterproofing replacement project, as described above, will impact the entire perimeter of Bay Scene’s condominium buildings. This presents the opportunity to rebuild all the entry wells – as opposed to the specified two to four - during site restoration. Catacomb access can be further enhanced through the alteration of the Tower 2 bayside stairwell. These enhancements can be accomplished at an estimated cost of $63,400.
Nautilus has advised that improved entry wells will facilitate worker and material access and significantly reduce the cost to replace (and maintain) plumbing in the catacombs.
The cost for new lighting in the catacombs is estimated to be $53,700. However, it is not certain that the electrical supply to Bay Scene is adequate to accommodate this additional load. It is therefore recommended that this task be deferred.
The City of San Diego’s recent replacement of the sewer main under Gresham Street included the installation of new sewer laterals to the Bay Scene property line. This creates an opportunity that was not available when initiating this Special Assessment project: upgrading Bay Scene’s sewer connections to City system. The cost for this very desirable upgrade is estimated at $85,500.
Total estimated cost for this project, to include catacomb plumbing repairs, rebuilding all catacomb access points, and upgrading Bay Scene’s connections to the new City sewer main, is approximately $545,000, or $45,000 above budget.
5. REPAIRS TO BALCONIES ($240,000 Special Assessmen tBudget)
A preliminary survey of Bay Scene’s condominium balconies identified 11 with a high priority and 16 with a medium priority need for repair, at an estimated cost of $240,000. After detailed design development and construction documents were prepared, the need for repairs to additional condominium balconies as well as balcony edges on the exit stairway landings was identified.
The cost for this project is now estimated at approximately $380,000, or $140,000 above the estimated budget. This added cost can be deferred, but due to the need for contractor remobilization and inflation, can most economically be completed with the other balcony repairs.
SUMMARY
To date, work on Bay Scene’s Special Assessment projects have focused on garage podium slab structural repairs and curtain wall window replacement. The structural repairs have been completed, and work on the windows is progressing satisfactorily. There were some window leakage issues early in the installation process but these have largely been resolved, and lessons learned in the initial phases are being successfully applied as construction moves forward.
The principal budget concern is the cost for restoring areas affected by excavation for waterproofing repairs. Costs for the extensive site upgrades and enhancements contemplated in Bay Scene’s long-term Master Plan are over $1 million more than authorized in the Special Assessment.
The Board of Directors will be meeting in early May to set Bay Scene’s annual operating budget for the coming fiscal year. Addressing Special Assessment costs will be high on the agenda. Alternatives available to the Board in addressing the projected cost overruns include:
a) Reallocate funds from Special Assessment project underruns to projects with overruns. Our legal counsel has advised that California’s special assessment legislation allows such reallocations.
b) Use income from Special Assessment payment investments.
c) Raise monthly HOA fee by 20% (the maximum allowable without homeowner vote) to $1,440. This would bring in an additional $20,400/month, or $245,000/year.
d) Expedite the Catacomb Plumbing Repair project, already part of the Special Assessment. This could cut our plumbing leak repair and remediation costs in half (or more), saving on the order of $250,000/year.
e) Meet with the Master Planning team to explore and identify ways to reduce site restoration costs while still meeting design goals.
f) Explore prioritizing restoration projects, deferring some until later.
g) Explore the feasibility of another special assessment to cover cost overruns.