Regents to consider UI Stead Family Children’s Hospital project budget increase

At their next meeting, the state Board of Regents will consider the UI’s request to increase the Stead Family Children Hospital project budget.


Katina Zentz

The UI Stead Family Children’s Hospital is seen in September 2018.

Katie Ann McCarver, News Reporter

The state Board of Regents will consider the University of Iowa’s request to increase the UI Stead Family Children’s Hospital project budget to $392.7 million following an appellate court’s ruling that the UI owes millions to Modern Piping and Merit Construction for their construction work.

The $32.5 million increase, plus interest, is a revision of the hospital’s current $360.2 million project budget that the regents approved in September of 2015. The UI released a statement on April 4 which said the self-sustaining UI Hospitals & Clinics enterprise will fund the increased budget.

The new project budget will account for the remaining arbitration award the UI must pay Modern Piping and Merit Construction, according to regents’ documents.

“The University of Iowa Hospitals and Clinics requests the project budget be revised to allow payment of all outstanding construction contracts and litigation claims,” the document states.

The document outlined the potential budget increase with an approximate $58.97 million more allotted toward construction. A decrease was shown in the amount of money allotted to planning, design and management, contingency, furniture and equipment, and art.

RELATED: UI to ask regents to boost UI Stead Family Children’s Hospital project budget to pay construction disputes

The regents will further discuss the request at their April 18 meeting on the UI campus.

This follows the Iowa Court of Appeals’ ruling backing Modern Piping on April 3, affirming the 6th District Court’s ruling that the university must pay the Cedar Rapids-based company a total of $21.5 million for their contribution to the hospital project.

According to the UI statement, the budget increase will cover the remaining $17.9 million it owes Modern Piping reflecting the arbitration panel’s award. In total, the UI will have paid the company $73.97 million for work on the Children’s Hospital and Hancher Auditorium.

The statement said Merit Construction reached a settlement with the UI for $9.4 million for work on the Children’s Hospital. Once it’s paid, the university will have paid the other Cedar Rapids-based company $63.2 million. Merit Construction received an additional $1.2 million in attorney fees and expenses.

The UI and the regents have reviewed all construction contracts, procedures, and delivery methods, the statement said.