SEATTLE - The new Alaskan Way Seawall will not be done on time nor on budget.

That's the word from the Seattle Department of Transportation which, for months, had hailed the project as a shining example of how it can handle major projects. It was scheduled to be completed by 2016, on time and on budget, leaders said.

But, SDOT Director Scott Kubly admits the department underestimated the true cost and time needed to make the repair.

"We had a project. For us to work within our budget, we were going to have to have everything go right. And you know what? Not everything has gone right. We've had a lot of risk items materialize," said Kubly.

Voters approved a bond measure in 2012 to pay for $290 million of repair to the quake-prone seawall and for waterfront improvements. It was promised that the measure would fully fund the first phase of the seawall.

But soon thereafter the project was budgeted at $300 million.

Quietly, that number rose in 2013 to a bit more than $330 million.

Now Kubly says it will take $409 million -- more than 33% over the original budget -- to complete. He also says it will take an additional year to build and won't be completed until 2017.

Kubly says the project, designed to replace the century-old seawall, has presented challenges no one anticipated during the original design.

Part of the problem, says Kubly, has been the decision to use jet grouting to stabilize the existing soil behind the seawall face. It was seen at the time to be a more effective, less intrusive way of building the structure. There are 6,000 jet grouts, five feet in diameter, being built.

As the same time, the heavy machinery currently in front of Colman Dock is also pumping out "spoils" -- a slurry mix of contaminated soil and water which is then trucked off site.

Kubly admits it hasn't been the most efficient process and has cost time and money. He also says a decision on "water management" and stabilizing the soil on the east side of the project has also proved costly. SDOT went with a "soil freeze," said Kubly. That process, which involves a labyrinth of pipes, freezes water below the surface and provides a buffer to prevent liquefaction and any erosion, especially in the event of a quake.

"There are a lot of things we're going to look at to see what we can do better," Kubly admits.

He says that plays into the decision to stretch out the timeline until 2017. It will allow SDOT to spread out the traffic impacts along the waterfront and, potentially, look for some cost efficiencies in other areas.

An internal memo obtained by KING5 shows SDOT and Mayor Ed Murray have targeted four different revenue streams to pay for the cost overruns. SDOT says, because the city had previously budgeted $338 million for the project in the the most recent budget cycle, it is seeking an additional $71 million to complete the Seawall from the sources.

  • A commercial parking tax, which is part of a revenue stream which could go to future large capital projects, like streetcars and bridge replacements
  • A real estate excise tax, which is part of a fund dedicated to additional road maintenance and system enhancements
  • Waterfront parking revenue
  • A Waterway fund, which is from fee revenue generated from "waterway use permits"

Kubly was coy about the fallout from the situation, saying "if there was mismanagement we're going to root it out and respond appropriately."

"I think it's a damn shame," said Council member Jean Godden, who chairs the Seawall committee. "I'm sad, dismayed and want to find out what happened."

She told KING 5 she applauds the mayor's call for an audit.

"We need to get on it, look at it, keep it transparent, let the public know what went wrong, what happened, and we must find out, and we must proceed, because we have a seawall that needs repairing and we need to finish it," said Godden.

No other council members were willing to talk to KING 5 on Friday. With an election just around the corner, it's yet one more sensitive issue and another example of a high profile project delayed and over budget.

The Seattle Tunnel Project, which aims to replace the viaduct, is now two years behind schedule and in question. The tunnel boring machine, known as Bertha, has been stalled, repaired, and the timeline to restart drilling continues to be a moving target.

Kubly says Bertha's problems, which led to settlement in the Pioneer Square area, are not connected to the seawall issues. It may even buy the City some time. The original plan called for the seawall to be completed in order for the viaduct to be torn down.

But the timing is not good in another respect.

Kubly and Murray are both pitching a $930 million transportation levy to voters in the fall for a variety of major, multi-modal improvement projects.

The SDOT director also defended his department when asked how, given the status of the seawall and tunnel, the city could keep its word the levy would deliver the projects it promises.

"We're going to finish this project," he said, while pointing to projects like Mercer Street and elsewhere in the city. "It's the biggest project we've ever done, the most complicated we've ever done."

Murray says he does not believe the issue plays a role into the levy discussion.

"I don't think this is a time to stop improving our transportation system," said Murray.

The mayor did say he's asking for the city to hire consultants to examine the seawall project and how it can learn from the mistakes.

"I'm asking we get outside experts to analyze the project from the beginning, and budget decisions along the way," said Murray.

Murray also said he didn't want to second guess the planning on the project which was initiated during the Mike McGinn administration, although "perhaps there were decisions I wouldn't have made, the contract (for the seawall) put too much risk on the city."

Murray said he believed there are some positives to come out of the current situation.

"Decisions were made. Good technical decisions were made that is making the seawall safer. But our ability to monitor those costs has not been good. It's sort of a good news, bad news story," Murray said. "There are a series of issues where the city needs to be a better job of controlling its costs and this is certainly exhibit A."

Businesses along the waterfront, meanwhile, were not thrilled to hear about the delayed completion.

Ivar's still has a packed lunch line, but business has been down 20 to 30 percent. And the restaurant's president wasn't pleased to get the news about the seawall construction.

"From what I understand, they expect another year long delay, to analyze alternatives," said Ivar's President Bob Donegan. "And they expect the cost to be up for another 100 million or so."

"We'd rather have them do it right then do it quickly," he said.

"We're not excited about it as a business but at the same time we want to have a patient view," said Jamie Munson, Simply Seattle general manager. "It's going to be a great product when it's done."

Businesses like Simply Seattle, which still enjoy a steady stream of customers, say the challenge is helping customers find the store and get to it.

"We get that from customers all the time," he said. "'Where do you park? How do you navigate that?'"

Part of that has to do with the labyrinth of walkways for pedestrians and the detours for cars. It's hard to give directions with an evolving environment.

"The parking being disrupted was a big impact," said Kyle Griffith, co-owner of Pier 57. "There were less people on the waterfront with the parking gone."