- The Washington Times - Saturday, January 19, 2002

Members of Congress spent two hours yesterday wading through cost overruns and trying to pin down a completion date for the District's new convention center.

Rep. Constance A. Morella, Maryland Republican and chairman of the House Government Reform District of Columbia subcommittee, called the hearing to address concerns about the rising costs for the new center $21 million in overruns since Nov. 30, based on the most recent report from the General Accounting Office.

Costs rose from $778.2 million to $799.5 million owing to design changes, payroll increases, removal of hazardous materials and increased inspections by the general contractor, Clark Construction Group.

The original "guaranteed maximum price" for the center was estimated to be $500.6 million in 1998.

Mrs. Morella and Delegate Eleanor Holmes Norton, D.C. Democrat, are also worried the project may face a shortage of funds owing to the financial fallout that hurt tourism after the September 11 attacks.

"The convention center is an unusual project in that it is primarily paid for by the private, hospitality industry," Mrs. Norton said.

"I'm concerned the hospitality industry will not be able to meet these costs in light of the slowdowns after September 11."

But the District's chief financial officer, Natwar M. Gandhi, said the slowdown in tourism won't affect the convention center opening date of March 31, 2003. The final touches won't be made until Oct 31, 2003.

The city had expected D.C. restaurants and hotels to pay some $65.3 million in dedicated taxes as their share of the center's cost. But their contribution was cut by $5 million, owing to lost tourism revenue, based on a study of hotel and restaurant business conducted by the Washington Convention Center Authority.

"We now expect $60.3 million. We will have a more precise estimate of this number by March of this year," Mr. Gandhi said.

A "new maximum price agreement between the construction manager and the center authority" should be voted on and signed by Friday, said Lewis H. Dawley III, CEO of the Washington Convention Center Authority.

Mrs. Morella warned the panel that "if the agreement is not signed soon, you can expect to be sitting in front of this committee again in the near future."

One of the biggest reasons for the overruns is the inclusion of costs previously considered outside the agreement, including the expansion of the Mount Vernon Square Metro station and the removal of contaminated soil.

Mrs. Norton said she expects any expansion plans of the center itself to be worked out by the next hearing. The design of the center is 99 percent complete and the construction is 55 percent done.

"The old center was obsolete by the time it was built. There is a risk that this center may not be large enough by the time it is finished," Mrs. Norton said.

After the center opens, additional space, if needed, will come from using underground space in a new convention center hotel that the city expects to be built by private investors, said Eric Price, deputy mayor for economic development. Mr. Price's office is still working to find a location and builder for the hotel.

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