What is Done and Left Undone: The Unfinished Saga of 3505 Hamilton Street

One evening in November, Hyattsville’s city council sat and talked about the new police headquarters. An elected official named Robert Croslin was concerned about rising construction costs on the project. Two other councilmembers asked for a clear project budget. There was a national election the following day, and Donald Trump was running for president. Eggs cost $1.32 a dozen; Apple recently released the iPhone 7; and Hyattsville’s city council still met in person. It’s November 2016 — eight years ago.

Six years prior, back in 2010, the city of Hyattsville had purchased the old BB&T Bank Building at 3505 Hamilton Street for $940,000. The city had funded the purchase in part with $650,000 of debt proceeds, financed over 15 years. Then the city hired HESS Construction and Engineering Services to produce “a comprehensive facilities management assessment.” That assessment concluded it would take about $4.4 million to adapt the building for the city’s use as office space, according to a November 2016 memo. In 2015, city staff said that the building would be ready by October 2018, with construction planned for 2017 and 2018.

But that $4.4 million price tag and October 2018 move-in date didn’t last long. In February 2016, the city hired Johnson, Mirmiran, & Thompson (JMT) to provide engineering services and an “updated proposal” for the cost of turning the bank building into police headquarters. And in November 2016, Hyattsville city administrator Tracey Douglas broke the news that the expected construction cost had nearly doubled from $4.4 million to $7.7 million. The project completion date was pushed back to 2019.

JMT’s $7.7 million estimate covered only construction, not additional costs for “technical equipment and furnishings,” according to meeting minutes. Douglas reported that information technology equipment alone might cost another half a million. She also said that the cost increase was due to price increases since the 2011 HESS report, as well as costs associated with hazardous materials abatement, elevators, complying with the Americans with Disabilities Act, and stormwater mitigation.

Eight years ago, the surprised councilmembers had many questions. Then-councilmember Croslin (Ward 2) called the cost estimate “shocking” and asked why costs like elevators and hazard abatement weren’t included in the original estimate. Councilmember Bart Lawrence (Ward 1) asked when the council would know the total cost of finishing the building, including non-construction costs. When Douglas said that it would be “a little difficult to project,” Lawrence replied that he was “concerned” that if council committed to renovating 3505 Hamilton Street at $7.7 million for construction, there would be additional costs later to fully finish the building. Councilmember Patrick Paschall (Ward 3) said he was concerned about the “back of the envelope calculation,” because the city had already had “unexpected significant cost overruns” on a public works facility project.

Paschall also asked how much the city had already spent on the police headquarters project. Public works Director Lesley Riddle said that the city had already spent about $500,000, which presumably did not include the purchase price of $940,000 in 2010. Douglas also said that cost overruns were “beyond our control.” Ultimately, the city council approved another $1.5 million to JMT for professional engineering services “in support of facility planning.” At the time, staff said that about 3% of the $1.5 million expenditure would go towards pre-design costs and promised that the city wouldn’t spend any money on design until the council approved the project.

Another six months passed, and on May 1, 2017, the city council approved the project with a budget of $10.3 million, which Douglas presented as the final “all in” renovation cost for turning 3505 Hamilton Street into the police headquarters. It included $7.8 million for construction, almost $1 million for design, $1 million for furniture and equipment, and almost $500,000 for cost escalation contingencies, according to meeting records.

What changed: City council approved the project at $10.3 million, which included $7.8 million for construction, an increase from the original $4.4 million estimate

Approved spending to date:

• $500,000 to JMT for “professional consulting services”

• $1.5 million to JMT for engineering and design services

Total approved expenditures: $2,000,000

2017 to 2021: debt and design

When the council approved the project in May 2017, they knew the city likely didn’t have the cash on hand to fund the full project. Enter: municipal debt plans. According to the fiscal year 2017 audit, Hyattsville had $8.8 million in outstanding debt as of June 30, 2017, including debt from purchasing the 3505 Hamilton Street parcel. The city had last issued debt in FY 2013 through Maryland Community Development Administration bonds, where local governments pool their capital projects together and issue debt as a group through the state.

This time, Hyattsville planned to obtain an independent credit rating and sell the bonds on the public market. According to presentations by city treasurer Ronald Brooks and city bond counsel Lindsey Radar in August 2019, a public debt offering had benefits for the city, but Radar also told the council that Hyattsville was unlikely to be able to issue debt through the pooled local government bond or by selling debt directly to a bank because the city was behind on its audits.

Instead, Brooks said that the city was in a position to get a credit rating because it had almost caught up on overdue audits, saying “we’re still getting caught up, we’re almost there.” CohnReznick had just issued the city’s fiscal year 2017 audit on July 1, 2019, about 20 months after the due date, and the FY 2018 audit was still overdue.¹ Brooks also told the council that “once you get your bond rating, that’s something you want to maintain,” though the city would later lose its credit rating because of late audits.

In response to councilmembers’ questions about whether the city’s budget could support the new debt, Brooks told the council “yes, we can afford it, but we want to be careful about coming back to this body and asking for any additional debt.” The new debt put the city’s total bond obligations at $17 million as of June 30, 2020, or 82% of general fund revenues, according to the FY 2020 audited financial statements.

Radar also briefed the council on the required annual disclosures the city would have to make once it issued the general obligation bonds, in accordance with federal securities regulations. Route One Finance has previously reported on the city’s subsequent failures to comply with those same continuing disclosure requirements in connection with the 2019 bonds.

The entire $12.7 million bond package included $10.3 million for the new police headquarters and also funded a public works facility building. The city projected the debt would cost a total of $21.8 million between 2020 and 2050, according to the FY 2020 financial statements.

Design process and shifting timelines

Before contractors could renovate the building, architects and engineers had to design it. The city council had approved a $1 million design budget, and the council had also previously approved a $1.5 million contract for facility design and engineering services with JMT. Between 2017 and 2021, the city council approved an additional $435,000 to JMT for work on the police headquarters, almost the full amount set aside for contingencies in the 2017 approved project budget.

In December 2018, council agenda documents said that the building design would be finished by January 2019, and that JMT would be involved in producing a new cost report and updated schedule. Route One Finance is currently seeking access to those documents via Public Information Act request. But in January 2020, a year after the design was supposed to be finished, the council approved another $180,000 for engineering and design services, because of “new aspects and unanticipated challenges,” according to meeting minutes. At the time, Councilmember Erica Spell Wolf (Ward 5) asked whether there would be additional design changes. City staff said there would be no further design changes after this change order, and that the project would be ready for construction bidding. But no bidding happened in 2020.

At the January 19, 2021 city council meeting, staff was back with an update. Douglas told the council that JMT and city staff planned to finalize the design in 2021, choose a construction contractor by June 2021, and begin construction in summer 2021. Douglas also said that the headquarters would be ready in summer 2022.

What actually happened is that the city started the permitting process sometime in 2021, according to agenda documents, and also issued a preliminary construction bid document known as a Request for Qualifications (RFQ), where interested companies show that they’re capable of bidding on and completing the project. Construction did not begin in 2021, and the city missed Douglas’s projected finish date of summer 2022.

What changed: the new police headquarters was not delivered on expected schedule, the city spent most of the contingency budget on additional work from JMT, the city issued debt to pay for the police headquarters

New approved spending:

• $340,000 to JMT for additional engineering and design

• $55,000 to JMT for abatement

• $40,000 to JMT for project administration

Total approved expenditures: $2,435,000

2022: “The long-awaited public safety headquarters”

The 2021 construction start date came and went. In March 2022 as part of the FY 2023 budget process, Douglas told the city council “this year, we’ll also begin construction of the long-awaited public safety headquarters. There will be significant cost increases.”

At the following city council meetings in April 2022, city staff presented the proposed construction contract. Whiting-Turner had bid $18.7 million. Four-and-a-half years prior, Paschall had called the increase from $4.4 million to $7.7 million “astronomical.” Now the price had more than doubled again. In those intervening years, seven of the ten “aye” votes that initially approved the project in 2017 had left the council. Candace Hollingsworth, who had presided over the 2016 cost estimate and 2017 approval, had resigned her mayorship, citing burnout and other political priorities. Croslin, who had called the $7.7 million estimate “shocking,” was now interim mayor, and would go on to win the special mayoral election two months later.

Construction costs weren’t the only increase. Staff was also proposing more money to JMT, this time an additional $1.2 million for construction supervision, additional architectural and engineering services, and third party permit review. Councilmember Edouard Haba (Ward 4) asked staff about the JMT cost increase, to which public works deputy director Hal Metzler replied that the costs were “relatively the same” as 2017 and only a “small increase.” In fact, pre-construction JMT spending was already over the original design budget, and the $10.3 million budget from 2017 hadn’t included separate funds for construction management. Staff estimated in April 2022 that the city had already spent between $2.5 and $3 million on the project, including the cost of acquiring the land.

Council discussion turned to how to pay for the additional costs. The city already had $10.3 million in debt proceeds from 2019. Brooks said at that April 4, 2022 meeting that the city needed another $9.4 million, bringing the total renovation debt to $19.7 million, and that it could secure that with bond anticipation notes (BANs), a form of short-term funding that would later be refinanced with long-term debt. Brooks at the time said the city could “roll that out for 5 years,” refinancing the BANs while only paying the short term interest. But in fact, as the council would later learn, Maryland law only allows cities to take out BANs for two years. In April 2022, when Brooks first proposed this, the federal funds rate was at a historic low — 0.33% — but had begun rising from its steady trough from April 2020 to February 2022, a result of the Federal Reserve interest rate cuts in response to the pandemic recession.

In 2022, economic commentators wondered if Jerome Powell, Federal Reserve Chair, would be able to pull off a “soft landing,” curbing inflation without spiking unemployment. The pandemic recession had been relatively brief — February 2020 to April 2020 in the United States. Now Powell and the other central bank leaders were raising interest rates. From April 2022, when Brooks said the city could pursue BANs for five years, to August 2024, when the city issued long-term debt to refinance the BANs, the federal funds rate increased more than sixteen-fold to 5.33%, spiking mortgage rates and municipal debt costs along with it, before slightly easing in September and October 2024. But Hyattsville, unlucky Hyattsville, had to refinance its debt at the very top of the interest rate market.

That wasn’t Brooks’s only problem. He’d said that the city only had a “gap” of $9.4 million. But 10.3 + 9.4 is only 19.7. The city had already spent about $2 million on JMT, and was proposing to incur another $1.5 million to JMT and $18.7 million to Whiting-Turner, bringing the minimum cost to $22.2 million before contingencies, furniture, or equipment — $2.5 million over Brooks’s “gap” estimate. Sure enough, when Hyattsville issued the BANs, it was for $11 million, almost making up the difference.

At this point, no one seems to have mentioned communications equipment to council, except for a brief comment from then-police chief Douglas Holland back at that November 2016 meeting saying that he and other staff were looking at what communications equipment they could reuse from the existing police headquarters. However, as later meetings reveal, the staff anticipated needing communications equipment and had developed an initial plan that would later be reviewed by outside consultants.

Council unanimously approved the $18.7 million Whiting-Turner contract and the $1.5 million JMT cost increase in April 2022. Croslin, who back in 2016 had been concerned at the increase from $4.4 million to $7.7 million, raised no questions at either April 2022 meeting. In September 2022, almost four years after the building was supposed to be ready, the city hosted a “ceremonial groundbreaking.” Staff had not publicly presented a new comprehensive project budget that included the costs of equipping the building or additional contingencies.

What changed: construction costs went from $7.8 million to $18.7 million; the city adds on project management costs not included in the original budget; the city takes out debt

New approved spending:

• $18.7 million to Whiting-Turner to construct the building

• $1.5 million to JMT for project management

Total approved expenditures: $22,635,000

2023 to present: cost increases and delays

The Whiting-Turner proposal, as previously reported by the Hyattsville Life & Times, promised the building would be complete within 545 days of receiving “notice to proceed.” In January 2023, police chief Jarod Towers wrote in an opinion piece to the Hyattsville Life & Times that the building would be open in 2024. But still more cost increases were on the horizon.

Dispatch, IT, and security

In November 2023, the public heard about another expensive part of the police headquarters: the dispatch system. While the $18.7 million Whiting-Turner contract was for constructing the building, the police department still needed to fill the building, both with regular furniture and a new police dispatch system. As part of an American Rescue Plan Act (ARPA) presentation on November 6, 2023, city staff told the city council that “police dispatch IT upgrades” would cost up to $2 million, including both the cost to actually purchase the dispatch communications equipment as well as “project management work from a consultant to facilitate the transition.”

Throughout the discussions at the end of 2023 and through 2024, the total cost of the dispatch project was a moving target. Staff also shifted what ARPA funding was intended to cover, at one point appearing to double-count money approved by council towards two different police projects until contacted by Route One Finance for clarification.

In November 2023, Towers said that the total dispatch equipment cost was “estimated to be between $1.5 and 2 million,” but that the city would not know the true cost until they hired a consultant. Douglas said that Towers was “aggressively looking for grants” to cover the dispatch center costs. At the December 4, 2023 city council meeting, staff presented an ARPA spending plan that included $2 million for the police dispatch system, of which Metzler said $650,000 was urgent. The plan also included $300,000 to extend fiber optic internet service to the police headquarters. Councilmember Emily Strab (Ward 2) made a motion to commit the remaining available ARPA funds, just over $300,000, to the dispatch project, but the motion failed.

On December 11, 2023, Douglas sent an email to all councilmembers “to clarify the funding requirements for the communications center that were addressed at the last council meeting.” In it, Douglas said that the project as a whole actually needed another $3.6 million, almost double the amount disclosed in November 2023. Douglas broke down this request into three parts: $2.3 million for the dispatch system, $1 million for “IT and security,” and $300,000 for the internet extension. Douglas’s email said that they were asking council for permission to use $650,000 of ARPA money towards the $1 million “IT and security” line item, with the remaining $350,000 coming from canceling a prior contract for Skyline to provide the security system.

At the next council meeting on December 18, 2023, Metzler told the council that Whiting-Turner would charge $1 million for the IT and security work, and that this was the portion that was urgent. Metzler and Towers also told the council that they planned to hire a consultant to help with the final dispatch system cost, now estimated at $2.3 million.

Councilmember Sam Denes asked why the $2.3 million dispatch system wasn’t included in the construction cost, to which Metzler responded that the system isn’t considered part of construction. But the original $10.3 million budget did anticipate that there would be non-construction costs, such as furniture and equipment, to finish the building. Haba said that he didn’t support using ARPA funds, saying “we have dedicated enough ARPA funds for the police building.”

At the council meeting on January 16, 2024, staff requested two expenditure approvals. The first was $1,250,000 to Whiting-Turner for IT and security services, even though staff had previously said this would cost $1 million. Staff told the council that while they had previously planned to have Skyline and Dataprise complete this work, and had in fact signed a contract with Skyline for the security system, Whiting-Turner and JMT were now recommending that Whiting-Turner complete the work. Whiting-Turner, of course, could hardly be considered a neutral source on how much should be spent through them versus a separate vendor. The motion at the time said that $650,000 of the cost would be covered with ARPA, with the remaining money coming from the 2024 capital projects budget, including $350,000 of money from canceling the Skyline contract.

Staff also asked the council to approve a $58,200 contract with Mission Critical Partners, which Towers said would review the preliminary design “created several years ago” by Metzler and help Hyattsville purchase “the correct equipment, software, and hardware” for the police headquarters communications system. This communications equipment was not included as a separate line item in either the 2017 project budget, presented by Douglas, nor the 2022 “funding gap” discussed by Brooks. At the January 16, 2024 meeting, Towers said that the $2.3 million communications cost estimate was “on the high end of a verbal estimate,” and that the consultant would “help us streamline the process.”

$2 million for dispatch equipment

In June 2024, council saw the bill for the dispatch system: $2 million to Motorola Solutions up front, plus an ongoing service contract. The city council passed a motion that said $650,000 of the $2 million cost would come from ARPA — but, of course, the council had already approved $650,000 for the police dispatch system to be used on the $1.25 million Whiting-Turner IT and security contract, and ARPA documents at the time showed no second $650,000 line item. Route One Finance contacted the city in July 2024 to ask about the discrepancy, and city communications manager Cindy Zork responded that they were “investigating with the public works and finance teams but do not have a response yet.” Zork later said in a December 2024 email that the city used $650,000 of ARPA funds towards the Motorola dispatch system, but that the Whiting-Turner construction expenses originally approved for ARPA funding were “ultimately not eligible” and were “funded through the FY [20]24 capital improvement budget.”

More cost increases

In July 2024, staff proposed more cost increases for Whiting-Turner, JMT, and Mission Critical Services. Citing the difficulties with “the adaptive reuse of an existing building,” staff asked for a total increase of $2.1 million across the three vendors, as well as disclosing that the issues “have also increased the time required to finish the project by approximately 10 months,” calling to mind former councilmember Paula Perry’s (Ward 4)² warning back in 2016 that old buildings would always come with unexpected costs.

To justify Whiting-Turner’s $1.4 million cost increase, staff cited waterproofing, lighting, and dispatch system issues. According to meeting documents, Whiting-Turner told the city “additional changes could occur over the next several months,” and advised that “the city should have a contingency set aside for unknowns.” Meanwhile, JMT’s $500,000 cost increase was due to waterproofing issues, work on the security and IT systems, and design changes by the city. JMT was providing “full-time construction management services,” as well as “part-time project manager services,” supplementing the public works administration staff count, which had more than doubled in recent years.

Staff also requested another $200,000 for Mission Critical Services to consult on the dispatch system installation, prompting councilmember Joseph Solomon (Ward 5) to observe that “it sounds like we have a consultant for the consultant for the consultant at this point.” Towers told Solomon that Mission Critical Services had made valuable suggestions like grounding the tall radio tower required for the dispatch system to protect it from lightning strikes. However, Towers had already told the city council back in December 2023, before council approved any contract with Mission Critical Services, that the Whiting-Turner contract already covered building the radio tower and “grounding.”

Towers originally estimated that the dispatch system would cost $1.5 to $2 million. Douglas had then revised that estimate upwards to $2.3 million, but also said that hiring a consultant would help the city control costs. Between the actual equipment from Motorola and the consultant, Hyattsville ended up spending the full $2.3 million.

At that same July meeting, as previously reported by Route One Finance, city staff estimated that the 3505 Hamilton Project would cost a total of $26.2 million — but then said that didn’t include “engineering and design” services from JMT. From $4.4 million to $7.7 million to $10.3 million to more than $27 million, the police headquarters cost had grown by leaps and bounds over a decade — and still no police employees actually occupied the building.

More spending means more debt

The city council didn’t just spend June and July 2024 approving more police center costs — at least not directly. They also approved a second round of bond funding, both to pay off the short-term debt (BANs) taken out in August 2022 as well as to get more money to spend on the police headquarters. Ultimately, the council approved up to an additional $17.5 million in bonds. Some of this went to paying off the $11 million principal of the August 2022 BANs, which Hyattsville was only allowed to carry for two years under Maryland state law, despite Brooks initially telling council they could refinance the BANs for up to five years. Hyattsville also received about $3.3 million in new funds for the police headquarters. According to consultants at the time, the city had no option but to issue the bonds.

Unlike in 2019, when the city was able to do a public offering with a bond rating, the city had lost its credit rating in 2022 due to late audits and failed to regain it. Instead, the city did a limited public offering, which still required public and ongoing disclosure of various financial documents. As part of that public disclosure, the city acknowledged that it had failed to comply with its continuing disclosure obligations from the 2019 general obligation bonds.

In August 2024, Hyattsville issued a total of $15,070,000 in new debt at a 5% coupon rate. It is difficult to reliably calculate the long-term impact of this debt on the city’s annual debt service costs because of the current state of the city’s financial reporting. Route One Finance estimates the city will have $25.9 million of outstanding bond debt at the end of FY 2025, or about 94% of budgeted general fund revenues, up from $17 million at the end of FY 2020 (82% of general fund revenue) after the debt issuance that Brooks said would be “very difficult for us financially beyond this point to come back and ask for additional borrowing over and above where we are right now.”

In September 2024, the city council approved $530,000 for new furniture for the police headquarters. In November 2024, the council was scheduled to discuss $247,000 to extend the fiber optic internet cable to the police headquarters, but ultimately skipped that agenda item. Finally, in December 2024, the city council approved almost $70,000 for new fitness equipment at the police headquarters.

What changed: council approved more money for construction and project management; council approved the dispatch system; city issued more debt

What new spending did council approve:

• $2 million to Motorola for dispatch equipment

• $1.4 million to Whiting-Turner for additional construction

• $1.25 million to Whiting-Turner for an IT and security system

• $530,000 for office equipment

• $500,000 to JMT for additional project management

• $258,000 to Mission Critical Partners to consult on dispatch equipment

• $68,287 for fitness equipment

Total cost: $28,636,487

In Ray Bradbury’s 1950 science fiction novel The Martian Chronicles, humans in 2026 are sheltering from dust storms on Mars. Some day, possibly before 2026, Hyattsville Police Department will relocate to 3505 Hamilton Street. Some day, the Purple Line will run from Bethesda to New Carrollton. The adage time is money struck true for Hyattsville, as some of the cost increases were undoubtedly due to the city’s inability to keep pace with the project schedule, and taxpayers are set to pay off the price of sunk cost fallacies and path dependencies for the next twenty-five years.

“History doesn’t repeat itself, but it often rhymes” is attributed to Mark Twain. Subscribe to keep reading about the rhymes in Done and Left Undone, a series about Hyattsville’s capital projects, whether finished, in the works, or merely a twinkle in a consultant’s eye.

1. FY 2018 would be released about a year later in July 2020

2. When she resigned in 2018 to move to Bowie, Perry said of her public service, “I didn’t like some of the things that were going on, and I figured don’t complain, get out there,” as reported by Route 1 Reporter.