PHASE 2 construction update - 3/5/2026

The purpose of the Restoration Town Halls is to provide timely and relevant information about Phase 2 to all condo owners. We strongly encourage you to view the Town Hall video as soon as it is released. It contains much more detail about the key takeaways and other relevant topics listed below.

1. Dom DellaVolpe estimated that we are $7M under budget for Phase 2. This is the worst-case scenario. A less conservative but still likely estimate is $7M-9M under budget. This includes all contracted amounts, change orders, and future interest. These estimates are subject to change. A detailed financial update will be given at every Town Hall going forward.

2. Dueall Construction and Zahra Antaramian (Project Manager/Owners Rep) both confirmed there is NO CONSTRUCTION DELAY resulting from the $11M Window Change Order. When asked if the change order for the new windows would delay construction by 40 weeks, Zahra’s reply was “No.” Our Dueall Representative also responded “No.” He explained that the 40-week delay mentioned in the change order was based on additional physical time that might be required to replace all windows. However, now that the construction crews are skilled at installation and not every window will be replaced, the time can be made up. He still expects to complete Phase 2 in 3.5 years.

1. Detailed Financial Update – Dom DellaVolpe presented the first Town Hall financial update. It was very thorough. He went through several slides listing all costs including Dueall Construction, Project Manager/Owners Rep, Engineer of Record, property inspections, professional fees, grading/landscaping, all change orders, and contract contingencies. The total estimated costs remaining to be paid is $53.5M. We have 56.7M in the bank now for a positive difference of $3.2M. If you add back the $2M contingency already included in the budget, the “real” difference is $5.2M. Dom estimated $1.5M in interest earned over the life of the Phase 2 project based on lower-than-actual interest rates. He also anticipates that the change orders will come in lower than expected. The formula is this: $3.2M + $2M + 1.5M = $6.7M plus lower than expected change order actual costs. Therefore, $7M is a very conservative estimate.
2. Construction Map and Crew Counts – 11 buildings are under construction on the west side + 5 more on deck. 1 building is under construction on the east side + 3 more on deck. We currently have between 48-50 workers onsite every day. This number of workers will ramp up to about 100 per day once construction is in full force on the east side.
3. Other Buildings that will be under construction in 2026 – In addition to the 12 buildings currently under construction, Zahra listed all other buildings scheduled for construction in 2026. They are buildings 41-50 and 117-123. Exact start dates for each building are forthcoming.
4. Window Replacement – All second-floor windows are being replaced (the unflashed windows are one of the greatest sources of frame and sheathing damage). First floor windows that are framed in wood will be replaced. Arch windows that have leaked will need to be removed from their openings so that the frame of the arch can be replaced. The windows will then be reset and sealed in place. First floor rectangular windows that have leaked will be resealed. First floor rectangular windows that have not been leaking will not be disturbed.
5. Juliet Balcony Doors – The doors at Juliet balconies are being pulled. The opening will be reframed as needed. New pans (pans steer water away from the door) are being installed underneath the doors where previously none had been installed.
6. Drywall Repair: Paint Ready – Zahra projected an actual picture of a “paint ready” wall looks like on the inside of a unit after a window has been replaced.
7. Stucco Application – First black paper and mesh is affixed to the exterior. Then three layers of stucco are applied: Scratch coat, Brown coat, and Finish coat (with decorative touches. The stucco can be painted after curing.
8. Garage Openings – Some of the openings of two-car garages need repair. Structurally, the way the beam above the openings was supported was inadequate.
9. Roofs – The tile will soon be laid on the roofs of Buildings 21 & 22. The underlayment on Building 31 will be redone, at the general contractor’s expense. It was exposed to UV for too long.
10. San Pablo B – Going forward, San Pablo model B unit decks do not require a new wall or any enclosure that reduces the opening size. These decks are open to the exterior; exposure to water is expected. With the repairs that are being done, water should run off rather than sit idle.
11. Paint – Metal accessories, such as the balconies, will be cleaned, sanded, and repainted beginning Monday. Painting of Building 31 will start on Monday.
12. Financial Oversight – Zahra presented the Phase 2 process for financial oversight. It is very detailed and thorough. I recommend you watch this portion of the video if you have concerns. There is way too much detail to summarize in this recap. At the highest level, there are many checks and balances in the process that involve all parties – The Engineer of Record, the Owner’s Representative (Zahra), the Local KW Office, the Board Treasurer, and the Board of Directors. There is a step-by-step system to account for all material consumption, right down to the stud level. Every single piece of material is accounted for. To control budget risk, the rate of spending is monitored and projected (another detailed process). As a whole, project financial risk is determined by the overall material burn vs. overall progress. Zahra gave an example of their financial oversight process where the initial direction was that we should repair every arched masonry window opening at a cost estimate of $1.6M. We pushed back and said that not all these windows leak and we shouldn’t fix what isn’t broken. The Engineer developed an evaluation protocol, and the new cost estimate is $400k.
13. Change Orders – Change orders are independently tracked. Change orders are agreements for work that was not originally in the contract. Work addressed in a chang order does not automatically occur. It allows the work to happen if it is needed. The Board, Zahra, and Dueall are expecting change order credits since not all of the change order work will ultimately be done. The exact credit amounts are not known at this time. We will have a better idea later in the project.
14. Owner Questions – You should really watch the video to hear the questions and responses. In the meantime, here is a recap of the answers to several questions that were asked:

• No reserve money has been used to pay for the restoration
• An additional assessment is not planned to cover the costs of Phase 2
• Regarding window treatments and shutters – Every attempt will be made to exactly match the existing measurements when replacing windows. A variance of 1/16 – 1/8 inch is possible.
• The lanais will be painted the same color as they were before reconstruction began
• The change order for the new windows will not delay construction

The meeting concluded by reminding everyone that the Reconstruction map and Frequently Asked Questions (FAQ’s) are available on the Paseo Condo Website. Dozens of questions have been answered in this document, and it is constantly being updated.The Board is trying to schedule an upcoming Town Hall in the evening to allow for those on different schedules. It is very difficult to do this right now due to conflicts with evening social events.