Waller Creek Tunnel wasn’t built right, won’t function fully, city says

Poor-quality concrete. No tunnel liner. Missing rebar. A “patchwork of repairs.”

After more than $161 million spent, the new Waller Creek Tunnel has severe structural problems that will reduce its ability to control flooding in downtown Austin and lessen the tunnel’s lifespan, an attorney representing the city said in a letter to a contractor last month.

“This impacts the entire purpose of the tunnel,” the Feb. 23 letter said.

The city said S.J. Louis Construction, the tunnel’s primary builder, didn’t follow design specifications and instead built a shoddy tunnel with concrete and liner problems and with missing sections of rebar needed for structural integrity. Because of that, the Waller Creek project has lost much of its “freeboard” — essentially, its extra capacity built in to guard against unexpectedly large floods.

“The loss of freeboard reduces the primary purpose of the tunnel, flood protection,” the city wrote in the letter. “The City will never be made whole and is forced to accept a tunnel with a diminished value.”

Austin would like $22.3 million back from S.J. Louis.

The firm instead sued the city this week.

BACKGROUND: Costs for Waller Creek Tunnel may rise to $163 million

The Waller Creek Tunnel, under construction from the southern side of Waterloo Park since 2011, is a one-mile channel to Lady Bird Lake designed to protect nearby areas from flooding and allow development of a major portion of downtown that is currently in the flood plain. The project has been beset with delays and cost increases.

How badly might the structural issues affect flood control? The city won’t say.

City spokespeople issued a short statement calling the tunnel “a critical piece of our flood protection infrastructure” but refused to answer any questions, including what its capacity is believed to be now, whether the problems could affect redevelopment in the area and what the impact could be in case of a 100-year flood.

The defects have already caused delays and required repairs, the city’s letter said. In 2013 and 2014, Austin hired a forensic engineering firm to find out how bad the tunnel’s problems were and “discovered that the scope of defects was greater than originally thought,” according to the letter.

READ THE LETTER: Austin asks for partial reimbursement on Waller Creek project

S.J. Louis’s portion of the job was technically completed in 2015, and the firm continued to make repairs until last year, the letter said. But even with the repairs, the tunnel’s structural integrity and lifespan remain diminished, according to the city.

The Feb. 23 letter demanded S.J. Louis repay Austin $22.3 million for a 10 percent reduced value of the tunnel, delays in completing it and costs to determine the extent of the construction flaws. Without payment, Austin would terminate the firm’s $48 million contract, which has been paid, minus $1.5 million held in retainage.

Instead, S.J. Louis filed suit this week. The city can’t terminate a contract that’s already complete, the firm argued, saying that Austin confirmed work was finished in 2015. It called the city’s threat to retroactively terminate it a way to gain leverage to receive payment.

“The steps being taken by the City are repugnant to the concepts of fair dealing,” the suit says. “Termination of the Contract would devastate S.J. Louis’s business because it is required to disclose termination in future application for government/public works contracts.”

The firm asked for a temporary restraining order to prevent Austin from terminating the contract. Its representatives could not immediately be reached Wednesday.

ALSO READ: Contrary to plans, Waller Creek Tunnel operating unfinished for months

The dispute with S.J. Louis is separate from the other high-profile issue with the Waller Creek Tunnel: City officials realized in 2014 that the intake building in Waterloo Park, where water enters the tunnel and filters pull out debris, blocked a protected sightline of the Capitol. The facility was about 16 feet too tall, so pieces of the partly constructed building were demolished and a redesign began.

The extra construction work and related delays forced the city to pay intake facility contractor Oscar Renda Contracting about $5 million extra. The city has said it would try to recoup those costs from the two engineering firms that designed the tunnel system, Espey Consultants and Kellogg Brown and Root.

The cost of the project rose from $25 million when voters first approved it in 1998, to $68.3 million when the city asked Travis County for funding help in 2006, to $150 million in 2014 and then to $161 million in 2016, when the city added money to cover design flaws.

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