Convention center costs a worry

Prices are going up, and there's a contractor shortage as project gets under way

Staff WriterApril 6, 2005 

Skeptics on the City Council think Raleigh's new convention center will cost far more than the promised $192 million before it opens in 2008.

The first shovels of dirt get turned up this morning, just as construction costs start to soar.

Concrete prices have shot up 15 percent since the fall, the council learned Tuesday morning.

Aluminum and copper are up 20 percent. Steel pipe, steel sheets, metal studs, roofing materials -- all are going up.

"Look at the price of oil. That's got to affect the cost of construction," council member Jessie Taliaferro said Tuesday. "We haven't even put a shovel in the ground yet."

City Manager Russell Allen assured the council that the project is still under budget.

Some trimming has been done, he said. Some spots that were limestone will now be brick.

Raleigh used to have about $13 million in contingency money, a figure that now stands about $6 million. That is normal, Allen said, for a project this big.

"I guess I'm more optimistic than most," he said.

Taxpayers won't feel a pinch even if the convention center cost flies over budget. Hotel and meals taxes will pay for it all.

But fear of cost overruns is running high enough that the council backed off giving $28 million in leftover hotel and meal tax money to six other projects, including an outdoor complex at the N.C. Museum of Art.

Council member Tommy Craven called that money the city's "last safety net."

Money from the hotel tax should increase by 3 percent during construction, and a 5 percent rise for meal tax receipts is a conservative estimate, County Manager David Cooke said.

But there is a shortage of subcontractors who do much of the needed work, said John Muter, vice president of Barnhill Contracting, one of the companies overseeing construction of the project.

Many of those subcontractors are tied up with other projects, including Wake County school construction, which is facing a $59.6 million shortfall attributed mostly to higher costs.

Meanwhile, the city is hoping private investors will help pay for a list of extras. They include up to $1.75 million for fountains, $750,000 for a tower and $500,000 for a "shimmer wall" that appears to shift in the wind.

The city also will pursue receiving a major piece of outdoor art, which could cost up to $2 million in private money.

"Those extras will kill you," council member James West joked.

The council approved $37,500 to help pay for the design of those extras, and a fund-raising group will be led by Larry Wheeler, director of the art museum.

Taliaferro said that she is not willing to sacrifice quality for such an important building and that there is not much fat left to trim.

In a three-hour meeting early Tuesday, council and commission members viewed 14 poster-size pictures of the center. They watched a short video that showed a digital mock-up of the interior as string music played in the background. The video stopped in the middle of the ballroom, an opulent 32,000-square-foot room on the top floor.

"When that building is used at night, it will look like a lantern is lit at the top," said Marvin Malecha, dean of N.C. State University's College of Design. "It will give an indication that there is life in the building, life in the city."

It is still unclear, members said, how much light $192 million will buy.

Staff writer Josh Shaffer can be reached at 829-4818 or jshaffer@newsobserver.com.

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