Convention center's costs rising

Higher prices after hurricanes are blamed for costs $4.5 million above expectations

Staff WriterOctober 27, 2005 

More than 16,000 truckloads of dirt have been hauled out of the hole on South McDowell Street that will become Raleigh's new convention center.

But with the project only 9 percent complete, it has bumped into a new financial challenge.

This morning, the City Council and Wake County Board of Commissioners will hear that costs are running $4.5 million higher than expected.

With prices rising and laborers drying up after Hurricanes Katrina and Rita, there is increasing doubt that the project will stay within its $192 million budget.

"I'm extremely concerned," Raleigh Councilwoman Jessie Taliaferro said Monday. "Unfortunately, I'm not sure it's going to get better."

Much of the unexpected cost is due to price increases after Hurricane Katrina, especially for concrete, which is a vital part of the next stage of construction.

"A project this big, I think there's going to be some fluctuations from time to time," said Raleigh Councilman James West.

"I don't think there are many options now except to stay on top of it."

The convention center is thought to be the linchpin to a new downtown Raleigh. Many of the city's leaders link it with a revamped Fayetteville Street and hope that the two will push Raleigh into a higher class among cities.

At 500,000 square feet, it will be nearly triple the size of Raleigh's old convention center and connect to a new 400-room hotel.

It is being built with money from food and motel taxes in Wake County. This morning's report predicts that money from the food tax will continue to grow by 5 percent and the hotel tax by 3 percent.

The council and commissioners will hear from City Manager Russell Allen and County Manager David Cooke, along with the project's architect and contractor.

They will hear that $3 million has been saved by dumping convention center dirt at the Dorothea Dix Hospital campus, a project that will create soccer fields.

But labor shortages are likely to drive up costs. Post-hurricane rebuilding along the Gulf Coast and in Florida is taking workers from construction sites nationwide.

The cost overruns mean that the project's contingency fund has dropped below $1 million.

"I would prefer a larger cushion," Taliaferro said.

It is possible to save $4 million through "quality reduction," the report said. Several council members said they want to keep the center top-notch after so much expense.

"I am very concerned about a convention center that is not first-class," Taliaferro said. "I am not against investing what it takes to make it right."

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

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