Maria Ayerdi Kaplan Not “Ousted”: Salesforce Transit Center Cost Overruns From Market Forces, Not Her

Maria Ayerdi-Kaplan, Developer Of Salesforce Transit Center: Part Six Of Her Story as told to Zennie62Media. Part One > Part Two > Part Three > Part Four > Part Five > Part Six > Part Seven > Part Eight.

Salesforce Transit Center Developer Maria Ayerdi Kaplan, who is now former Executive Director of The Transbay Joint Powers Authority (TJPA) she created, has been wrongly tagged with blame for the cost overruns that pushed the Salesforce Transit Center to its eventual cost of over $2.2 billion.

UPDATE: On Fake News, Ms. Ayerdi, and the new Webcor – Obiyashi / Transbay Authority lawsuit.

Here, in Part Six of a series at Oakland News Now, Ayerdi Kaplan sets the record straight.

Maria Ayerdi was not wrongly “ousted” from her job as Transbay Joint Powers Authority Executive Director, by it’s board of directors, as incorrectly reported – she resigned on July 30th 2016.

2002 To 2008 and 2009 to 2012 Increase in metal prices.
2002 To 2008 and 2009 to 2012 Increase in metal prices.

The allegations that “cost overruns” on the Salesforce Transit Center Project were caused by anything Maria Ayerdi-Kaplan did were fabricated, and a little internet research reveals the real story: it was the market for steel, at the time, that caused the cost increases.

A brief look at change in prices for metals and metal products from 2002 to present backs Ms. Ayerdi’s claim that the market caused the cost overruns. The metals price index increased steadily from 2002 to 2007, then the economic crash occurred causing prices to crater. But, with President Obama’s economic recovery plan that focused on infrastructure spending, the metal price index jumped to record levels between 2009 and 2012.

Below is the Budget History for Phase 1 of the Transbay Transit Center Program when Ms. Ayerdi Kaplan retired from the Project:

 July 2013FinalTotal %
BudgetBaseline Total
Baseline$1,589 $1,899
Trade Packages Increase / Bids$104.1$265.4 $369.555%
RVA $56.8 $0$56.88%
Soft / Program-wide $35.0$10.9 $45.97%
Increase Contingencies and Reserve$114.5$83.7$198.230%
Subtotal $310.4 $360.0$670.4
Total $1,899.4$2,259.4

(Note: author reproduction of file provided by Maria Ayerdi Kaplan. Budget numbers in millions, thus $1,500 equals 1 billion, 500 million dollars.)

On the Salesforce Transit Center Project Funding, and based on what Ayerdi-Kaplan told Zennie62Media:

– 55% of the funding (in total for both 2013 and 2016) went to pay for trade packages that came in over budget due to the Bay Area’s construction boom and to increase the contingencies and reserves. The steel market increase was the reason for the July 2013 Trade Packages Increase/Bids Budget line item of $104.1 M. There was a spike in steel prices during this time period that no one could have predicted. The rebuild of New York’s Ground Zero alone had a huge impact on the steel market. In addition, there was a huge building boom in the Bay Area during the time the subsequent trade packages were put out to bid. As a result of the the Salesforce Transit Center Project, everyone wanted to build next to (or in close proximity to) the new station and the San Francisco construction market exploded. There were about 19 high rises under construction around the new Transit Center at one time. High rise building construction in San Francisco and the high-tech campus construction on the Peninsula all increased the costs for the mechanical, electrical, and plumbing package, the glazing design-build package, the ceiling & fascia package and the roof top park.

The positive benefit of the construction boom for the Transbay Project was that it increased the value of the land; Ms. Ayerdi sold it for record prices. In the end, Maria negotiated and sold over $660 million worth of land to fund the new Center. And thanks to the land she secured from Caltrans, San Francisco was able to obtain a line of credit to fund the remainder of the Transbay Project Phase 1 budget. The line of credit will be repaid from the tax and fees revenues generated from the land Ms. Ayerdi secured from the State.

– 30% of the funding was to pay for an increase in contingencies and reserves. It was demanded that an extra $83.7 million in contingencies/reserves be added to the final 2016 budget. The TJPA didn’t really need that much in contingencies/reserves but it allows some individuals to disingenuously later proclaim, once the project opens, that the project was “completed under budget”.

– 8% of the funding was for security of the new Center. Ms. Ayerdi always believed that it was important to design the center so that it was safe for the families and people that were going to visit daily.

– 7% of the funding went to soft, program-wide costs. Soft costs are tied to construction costs. The $45.9 million in additional soft costs was simply a percentage of increased construction costs. This figure rose proportionately to construction costs.  When construction costs go up, soft costs go up as well.

San Francisco SalesForce Transit Center
San Francisco SalesForce Transit Center (Photo courtesy

Maria Ayerdi Kaplan Fought To Maintain Salesforce Transit Center’s Roof-Top City Park Even As Some Others Wanted To Remove It

Was it hard to maintain the high design and architectural standards set for what became Salesforce Transit Center? It was “very tough,” Ms. Ayerdi said. Then she explained that “certain officials,” wanted to remove the park, but thanks to Ms. Ayerdi’s disagreement and public outcry the roof-top park stayed.

Later San Francisco Mayor Ed Lee’s Office and the TJPA would issue a statement “TJPA and the Mayor’s Office agreed to work together to ensure that the roof top park opens concurrently with the opening of the Transit Center in late 2017 as promised to the community. Both parties expressed their desire and commitment to find a way to ensure that this important public benefit maintains its original schedule.”

Also, there was talk by some officials of wanting to eliminate the Penrose awning. Again, Ms. Ayerdi held her ground and opposed getting rid of the awning because it provided shade to the public inside the station and served as an educational part of the new Center for people interested in math and science given the mathematical Penrose pattern. Dr. Penrose liked the design of the new Center so much that he allowed the TJPA at no cost to integrate into the awning the non-repeating mathematically derived pattern he developed in the 1970s.

Ms. Ayerdi picked the color of the Penrose awning. The architects at first presented her with a dull white (almost grey) color and she challenged them to come back with a shimmering bright white that would glisten in the sunlight, which they did and ended up as the color of the awning.

To provide further background on the Penrose pattern, the TJPA originally had glass with ceramic frit patterns as the skin of the new station. After the TJPA studied the type of glass needed to protect the public from a certain TNT load, they realized they could not afford it and, even if they could, it was still dangerous.

When it became clear that a glass awning was going to be cost prohibitive to secure under the Design Guidance Criteria, the architects asked Ms. Ayerdi to consider the same exterior as the one at the Federal building on 7th Street. Maria absolutely rejected that idea. She did not believe the exterior of that building was right for the Transit Center. Ms. Ayerdi directed the architects to go back to the drawing board and engage in extensive value engineering (as she required throughout the life of the Project). This process led to a redesigned skin that was a white painted aluminum metal. The TJPA retained the undulating petal like shape and then turned to Dr. Penrose for the design.

There was also a desire by some officials to eliminate security features which Ms. Ayerdi argued strongly against. She made it clear publicly at TJPA Board meetings that if the security features were eliminated the consequences would rest on those who made the decision to remove the security components. She additionally argued that it would be cost prohibitive to change the design.

Maria said “One of the things one official kept saying was ‘Well if you, Maria had bid things out earlier instead of doing all the security analysis maybe we wouldn’t have hit an expensive construction market.’ I said that even if I knew back then that later the market would increase I would still have done the security analysis. The safety and security of the public was number 1.”

The security features remained.

Stay tuned and click here for Part Seven. Also read about the praise Oakland Developer Phil Tagami gave Maria for her work on the Transit Center.

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