Gaithersburg's New City Hall Contract Came In 54% Over Budget - Tabled Once, Then Approved 5-0

Gaithersburg's new City Hall will cost substantially more to build than the contract the city signed last year contemplated. The city council approved the construction contract in a 5-0 vote on October 19, at a guaranteed maximum price of $24,705,523 - 54.4 percent over the $16 million budget written into the city's June 9, 2025 construction-manager contract with Plano-Coudon, LLC, according to a Moderately MoCo review of the council's October 19 meeting packet. With the $97,000 already paid for design work, the amended contract totals $24,802,523, and the full project - including $2.5 million of furniture, architecture and engineering, a Pepco utility relocation and IT equipment - is put at $30,137,148 in the staff report.

The project renovates a 75,000-square-foot, five-story office building the city bought in 2023 at 12 South Summit Avenue in Olde Towne, plus the adjacent vacant lot at 8 South Summit Avenue, to consolidate city departments - including permitting, licensing, inspections and records - now split across four buildings into what the city calls a one-stop shop, with shorter waits and more meeting rooms. Montgomery College keeps its fourth-floor lease through 2027, paying the city $440,000 a year. The council first took up the contract on October 5, when several members expressed concern about the level of documentation provided, citing the need for greater transparency given the project's scale, and voted 3-2 to table it for two weeks. Staff returned on October 19 with a letter from the owner's representative, O'Connell & Lawrence, the construction-manager contract and the trade bid sheets, and the council approved the amended contract 5-0. The owner's representative told the city the price reflected competitive bidding: the project drew 110 subcontractors across 30 bid packages, with three to six bids per trade, and the renovation was already carried in the city's approved fiscal 2027 capital budget with roughly $29 million allocated, plus about half a million dollars more for relocating Pepco utility lines.

Construction officially kicked off on October 23, the city said: the finished 65,000-square-foot municipal building will house 158 employees across seven departments, and the city's state delegation secured more than $1 million in state funding for the project. A project schedule in the October packet lists substantial completion for February 2, 2028 and final completion for April 26, 2028 - about a year later than the March 2027 completion date the 2025 contract had anticipated. One number residents may have seen elsewhere does not appear in the city's own records: Moderately MoCo reported that neither the $36.1 million total-project figure nor the $23.5 million figure in an October 26 Hoodline report appears in the May 4 or October 19 council packets or minutes it read in full - the figures in the city's records are $16 million, $24,705,523, $24,802,523 and $30,137,148.