Cost of Raleigh convention center leaps

Raleigh and Wake leaders plan to sign off today on a new price tag of $215 million

The price of Raleigh's new convention center has jumped to $215 million, a $23 million increase that Wake County leaders will likely approve today.

Already, the center is the most expensive public project in Raleigh's history. Almost a year after construction started, it remains little more than a deep hole off McDowell Street in the southern end of downtown.

An "extremely volatile" construction market has forced the 12 percent increase, City Manager Russell Allen said in a memo. That means more money for air conditioning, plumbing, wood, metal -- everything.

"It's a big number," said Councilman Philip Isley, who said he would reserve judgment until he hears the presentation this morning. "We'll hear the same things about the market. I do get tired of seeing this rise."

Wake County Commissioner Joe Bryan, a supporter of the project, said that he has long suspected the final cost would be higher than the original $180 million estimate. He said he was thankful that it was not as high as he had originally guessed.

"I think we will see that our staffs have managed this well, and that's simply where the market is right now," he said.

The convention center is expected to be the linchpin that rejuvenates downtown. Many of the frills, including a "shimmer wall" along its McDowell Street facade, are going up with private money.

At 500,000 square feet, it will be nearly triple the size of the old convention center when it opens in 2008.

With a first-class center, it is hoped, Raleigh will be in better position to draw regional and state conventioneers who will spill out into downtown restaurants and shops.

In 2004, when Raleigh's center existed only on paper, the budget stood at $180 million. Within months, that figure had climbed to $192 million.

By signing off on the new figure today, city and county leaders hope to nail down a price for good.

Project supporters will push to accept the inflated budget rather than cut back on some of the aesthetic extras of the center.

Wake residents will feel little of the hit directly because taxes on hotels and restaurant meals will pay the center's bills.

Mayor Charles Meeker said that the hotel and meal tax fund can absorb the extra cost. He said that more money will come from millions already borrowed that are generating interest while construction continues.

The cost increase is not expected to affect other projects paid for by the fund, such as an outdoor pavilion at the N.C. Museum of Art and an aquatics center in Cary.

Price increases are no surprise, Meeker said.

"We all knew once Hurricane Katrina hit and construction costs rose last fall, there was going to be some impact," Meeker said.

Unexpected costs, including asbestos in the old convention center, have drained away contingency money for the center.

Pushing the budget up to $215 million will set aside a new $4.5 million for that emergency fund.

Most of the increase, though, comes from rising construction costs, said John Muter, vice president of Barnhill Contracting, which is handling the construction.

Late last year, Raleigh's council learned that the costs of concrete and steel would shoot up by more than $4 million.

Increases to come include $3.9 million in air conditioning, heating and plumbing; $3.4 million for electrical work; $2 million for various metals; and about $1 million more for wood, Muter said.

He added that the trend is borne out nationwide. "It's getting impossible to predict," he said.

However, with 98 percent of the project's work already bid, county and city leaders say there will be less room for surprise.