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Convention Center Costs Continue To Rise

Posted December 18, 2006

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— Cost overruns continue to plague the new downtown convention center.

Raleigh and Wake County leaders heard Monday that another $6.4 million was needed to complete the facility. The latest change means the convention center is $42 million over its original budget.

“Our crystal balls have not been perfect,” Raleigh City Manager Russell Allen said.

"We've gone from $180 (million) to $192 (million) to $215 (million) to $222 million," Wake County Commissioner  Joe Bryan said. "I'm not happy about being here."

Officials blame higher material costs for much of the rising price tag. But more than half of latest money added to the budget is for extras like stone floors for the lobby and skylights that were taken out of the project previously, and the construction team thought they'd have enough money in the end to put them back.

“They should never have been taken out in the first place,” City Councilwoman Jessie Taliaferro said. “We are in a competitive market, and I think those details are important to the quality of the building."

Critics said the building could still be successful without stone floors and canopies to shelter visitors.

“I'm not sure how much that adds to the overall experience a conventioneer is going to have,” Commissioner Paul Coble said. “At some point, you have to say, 'That's enough.'”

Commissioner Betty Lou Ward disagreed.

"I don't think we should make any apologies for trying to make this building beautiful. It's something that going to be substantial for a long time yet to come," Ward said.

The convention center already has lined up advance bookings that are double initial projections. So far, three international conferences, 11 national conventions and 18 state and regional events are scheduled to be held in the facility, which is slated to open in 2008.

About $3 million of the new money would go into a contingency fund to help fund other construction changes on the convention center.

Raleigh Mayor Charles Meeker wants to use additional dollars from taxes paid mostly by visitors, so a local tax increase wouldn't be needed.

"We are very fortunate that the funds coming in from the hotel, motel and prepared food taxes are actually far more than this adjustment, so hopefully it's something the current formula can handle," Meeker said.

Both the hotel and restaurant taxes have grown seven to 10 percent faster than financial planners predicted.

But officials said there is no guarantee that costs for the convention center won't rise again.

"The truth is we are going to be here again," Bryan said.

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  • FloydRTurbo Dec 18, 2006

    ... from 20 years in the hotel/convention bizness, lets talk about "padding those bookings". We called'em "Stars Wars bookings" because they were way way out in the future ... not worth the non-binding forms they were submitted on. ... and based on Full Block "every night". .... often the salesperson simply "makes up" the organization under the rightful assumption that "those numbnutz at City Hall won't know the difference" and they are correct.

    As for escalating materials costs ... when have material costs ever GONE DOWN. If the original cost estimates had had any purpose other than to fool the aforementioned "City Hall numbnutz" they would have factored in cost increases.

    Costs are ALWAYS low-balled ... Revenues ALWAYS high-balled. Thats the way you ALWAYS fool'em to get approval. Played that game for 20 years until one day I quit to play piano for a Durham escort service ... and be respectable.


  • YeahWhatever Dec 18, 2006

    Hey folks, if you bother to do a bit of research, the prices of steel, concrete and diesel fuel (all just a bit important for this type of work) have skyrocketed since the project began. These aren't made up figures, it's a real problem. The only way to mitigate that is to buy all the construction materials at the beginning. But where do you store it and where do you come up with all that cash up front (rather than over the life of the project)? The same problems occur with road construction. Costs don't just magically go up. Global consumption of construction resources is insane right now (talk to the Chinese)

    Another way of looking at this: We are a grown up city. I'm sick and tired of folks who seem to think we still seem to live in "small southern town". I've rarely, if ever, lived in a place where people are apparently so opposed to public projects. Perhaps it's only the opposition that bothers to speak up.

    BTW, they aren't doing so bad on those bookings are they?

  • AuntySocial Dec 18, 2006

    The people voted against this, but Raleigh went ahead with it anyway. Now the people who didn't want it get to pay dearly for it.

  • RUN1UPNYA Dec 18, 2006

    They must be using the same contractors that built the RBC center. KB Raleigh

  • photoz Dec 18, 2006

    How could you expect them to keep this under budget, Raleigh officials can't even keep their sanitation workers happy.

    Way to go Meeker!

  • FloydRTurbo Dec 18, 2006

    The "economic impact" of convention centers is ALWAYS greatly exaggerated by proponents. The costs to build and maintain them are ALWAYS greatly under estimated.

    I suppose it is comforting to see that Raleigh officials were as gullibly naive as are most civic bureaucrats on this subject.

    Remember, you cannot blame "this one" on the voters since we were not even given the opportunity to vote on this latest boondoggle.

    Anyone who thinks this is the last "cost increase" for this bottomless money pit simply isn't paying attention. .... sigh, sob, sniff ...