Convention center work to halt
Orange County stops $600M controversial expansion project to conserve cash
Orange County will stop all work on a more than $600 million convention center expansion — a project that records show was already threatening to balloon far over budget even as tax collections collapse amid the COVID-19 pandemic.
In a memo to county commissioners, Orange County Mayor Jerry Demings announced that his administration will suspend or cancel all contracts tied to the proposed expansion in a bid to conserve cash.
Demings had previously said he would delay construction of the convention center expansion because of collapsing hotel taxes.
But his administration had continued to spend millions designing the project — a top priority of the region’s tourism industry, which profits off the convention center by selling things like hotel rooms, restaurant meals and theme-park tickets to convention attendees.
Records show Orange County had spent more than $6.5 million on the expansion in just the two months since Demings said the project was being put on hold, using budget reserves to cover the costs.
“Initially, we intended to complete the design to have a 100 percent set of drawings,” Demings wrote in his memo.
“However, I have looked at the additional cost required to reach that milestone against a backdrop of significant uncertainty of when to proceed with the project. Additionally, we are unaware of the design changes that may be needed to successfully complete and operate in the post-pandemic environment.”
Altogether, Orange County has spent more than $12 million designing and preparing for the expansion so far. Halting all work now will allow Orange County to defer roughly $18.5 million in additional design costs, Demings wrote in his memo.
Urged on by tourism lobbying groups like the Central Florida Hotel & Lodging Association and the International Drive Resort Area Chamber of Commerce, Orange County leaders first approved the convention center expansion two years ago. The expansion, which would add roughly 1 million square feet to the already 7 million-square-foot complex, calls for more exhibit space, a big ballroom and additional meeting rooms.
Construction was supposed to start this year. But then the COVID-19 pandemic brought global travel to a halt and sent Orange County’s hotel tax, which is supposed to pay for the project, into an unprecedented tailspin.
After county hotel taxes fell 97% in April, 95% in May and 89% in June, Demings announced in early July that construction would be delayed. But he said the county would press on with design.
As design progressed, though, so did the project’s potential price tag
Records obtained by the Orlando Sentinel show that the company serving as the project’s construction manager estimated in mid-May that the expansion would ultimately cost $720 million — nearly 20% over the county’s official budget of $605 million.
The cost estimate was so far
over budget that it set off alarms among county staffers about the construction manager, PCL Construction.
“Further use of PCL poses the risk that they may bid the project at the end of the design significantly over budget, which would leave the project at a standstill and unable to progress into construction,” an Orange County staffer wrote in an internal memo distrib
uted in mid-June.
A spokeswoman for the convention center called it an “old memo” that is now outdated. “Had we moved forward with the project, the estimate would have aligned closer to to our $605 [million] budget due to reassessing the value engineering in later discussions,” spokeswoman Nadia Vanderhoof said in an email.
In his memo, Demings announced that the county has decided to cancel PCL’s contract.
He also said the county is suspending, for up to 120 days, the biggest contract it has signed so far tied to the project: A roughly $40 million architectural and design pact with a joint venture between Kansas City-based Populous and Orlando-based C.T. Hsu & Associates.
If economic conditions and hotel tax collections don’t improve over the next four months, Demings said the county can cancel that contract, too.
The ultimate decision about if and when to relaunch the convention center expansion will be made by a county commission that is about to undergo a significant shift.
In August, voters in the western and southwestern part of the county, decided to oust incumbent Commissioner Betsy VanderLey, a committed supporter of the convention center expansion, in favor of Nicole Wilson, a fierce critic of the project.
Wilson will formally replace VanderLey on the board in December.
Two other incumbent commissioners who had supported the expansion before COVID -19 struck — Commissioners Emily Bonilla and Mayra Uribe — were reelected in August. But both said during the campaign that they did not know if they would support the project again after the coronavirus pandemic passes.
“As we evaluate our future space needs, we will do so responsibly,” Demings wrote.