Down market benefits project

There’s an upside to the depressed construction market for Newport Beach.

City officials announced this week that bids to build the new Oasis Senior Center in Corona del Mar came in so low they won’t need to borrow any money to finance the project for the time being.

“This is another example of the city’s financial stability and opportunity to take advantage of a depressed construction market,” Newport Beach City Councilman Keith Curry said.

Original estimates for the project came in about $20 million, but city officials say the total cost of the building is now closer to about $16.5 million.

The city received about 18 bids from construction companies to build the senior center.

At least three companies put in bids to build the center that were about $11 million — much lower than what city officials had originally estimated it would cost to build the new center on Marguerite Avenue, Curry said.

The city had originally planned to borrow money to fund part of the project by floating certificates of participation, a type of financing where cities use land and building as collateral to borrow money for large municipal projects from investors.

“Because bids came in so low, we decided to put that bond issue on hold, at least for now,” Newport Beach Administrative Services Director Dennis Danner said Thursday at a Newport Beach finance committee meeting.

The Newport Beach City Council could award a contract to build the senior center as early as March 10, Curry said.

Groundbreaking on the project will take place soon afterward.

It will take about 18 months after construction begins before the building is completed and Oasis can begin hosting programs out of the new center.

The city has pledged $10 million to the project and about $5 million will come from development fees from the Irvine Co. The rest of the money is scheduled to come from private donations.

Hoag Memorial Hospital Presbyterian pledged $2.5 million to the new senior center last year.

Reporter BRIANNA BAILEY may be reached at (714) 966-4625 or at brianna.bailey@latimes.com.