Some cost overruns on The Commons downtown project could leave less money to build additional parking, Medford Urban Renewal Agency board members were told Thursday.

Some cost overruns on The Commons downtown project could leave less money to build additional parking, Medford Urban Renewal Agency board members were told Thursday.

The MURA board — consisting of City Council members — reviewed its budget and now anticipates the funding available for parking could drop from $3.5 million to $1.5 million.

While some costs have increased, others have decreased and haven't changed MURA's overall budget cap of $11.6 million as its remaining share of The Commons, a joint venture between MURA and Lithia Motors.

Costs that have come in lower than expected include property acquisition, which dropped from $3.4 million to $2.6 million.

Budget items that have pushed up costs include moving underground utilities, new traffic lights and improving Riverside Avenue.

Planning, engineering and administration by Lithia Motors for the two parks in The Commons jumped from a budgeted $200,000 to more than $1 million.

Mark Millner, a downtown merchant, said he supported the project for downtown but expressed concern about cost overruns.

"It is, in my opinion, unacceptable," he said.

Dick Gordon, MURA board president, said a small cost overrun is not totally out of line on a project of this magnitude. But, he added, "You hate to see it."

A big question for the MURA board is whether it will have to pay an unbudgeted $740,000 for a storm-drain system, which is still being hashed out with environmental regulators.

"I thought we'd found a way around that situation," said Chris Corcoran, MURA board member.

City Finance Director Allison Chan said the $740,000 describes a worst-case scenario. "It's not going to be anywhere near that," she said.

Eric Iversen, project manager for Lithia, said he hopes that ongoing negotiations with the Oregon Department of Environmental Quality could bring down that cost to $150,000 or less.

Corcoran expressed concern that more cost overruns could be encountered as the project proceeds.

Iversen said most of the increased costs so far have resulted from unforeseen problems with underground utilities. Some features, such as flattening the crown on Riverside Avenue, were unexpected but have ultimately benefited the city, he said.

He said that most of the work going forward will be above ground, making the costs more predictable.

Iversen said that the agreement between MURA and Lithia envisioned parking as the final project in The Commons, once everything else is completed.

Reach reporter Damian Mann at 541-776-4476 or dmann@mailtribune.com.