Rising Costs Send Convention Center $100M Over Budget

Fri July 18, 2008 - Northeast Edition
CEG



PHILADELPHIA (AP) The Pennsylvania Convention Center’s expansion is almost $100 million over its original $700 million budget and skyrocketing prices for building materials could push the project’s cost even higher, officials said.

“You’re getting to the point where the cost will outweigh the benefit,’’ Gov. Ed Rendell told The Philadelphia Inquirer for a story July 12. “You’re not there yet, but you’re getting to the point.’’

Officials said that surging prices of steel, concrete, copper and aluminum are to blame.

Convention Center president Al Mezzaroba said the project, slated for completion in 2011, is currently estimated at $90 million over budget.

But Rendell told the newspaper that he believed the figure could be more than that, adding that bids have not yet been received from the various subcontractors working on the expansion.

The amount of the shortfall will become clearer in mid-August, the bid deadline for the next phase of construction, Convention Center Authority chairman Buck Riley said.

After years of seeing convention and trade-show business slip away to other major East Coast cities, work began earlier this year to expand the 15-year-old convention center downtown.

Demolition work is nearly complete for the expansion, which is funded by state slot-machine revenue. It will increase the space that can be rented for conventions, trade shows and other events from 624,000 sq. ft. to 1 million sq. ft.

Rendell said the Legislature was unlikely to approve more than the initial amount earmarked last summer.

“There’s no appetite in Harrisburg to go back and do more than $700 million,’’ he said. “Even I wouldn’t ask.’’

Rendell said he asked the city to contribute up to $5 million a year for at least 20 years.

Mayor Michael Nutter said he had not yet answered the governor’s request, but noted the expanded facility will be a more powerful economic revitalization tool.

Besides creating construction jobs, officials expect the expanded facility to lure tens of thousands more conventioneers who would spend money in Philadelphia hotels, restaurants and shops.

Noting that the city’s only existing financial obligation to the expanded center is a yearly $15 million, City Councilman Bill Green said, “For us, it makes great sense ... We’ll have all these extra additional conventions and tourists here spending money in the city.’’