Project “way over” $104M

Rooftop ex­pan­sion far from start­ing; new price tag re­mains un­clear.

The Denver Post - - FRONT PAGE - By Jon Mur­ray

A rooftop ex­pan­sion of the Colorado Con­ven­tion Cen­ter that down­town boost­ers por­tray as vi­tal for its com­pet­i­tive­ness still is far from launch­ing — 16 months af­ter vot­ers ap­proved tourist tax ex­ten­sions to raise $104 mil­lion for the project.

Den­ver city of­fi­cials now ac­knowl­edge that the tax money, to be raised from car rentals and ho­tel stays and used for bor­row­ing, may not be enough to cover the com­plex project.

“It’s way over $104 mil­lion,” said City Coun­cil pres­i­dent Al­bus Brooks, who is part of the project’s lead­er­ship team and has kept tabs as mul­ti­ple de­part­ments ham­mer out de­tails. “But I think it’s too early to say how much.”

A more con­crete price tag won’t be avail­able un­til later this year, af­ter of­fi­cials and out­side con­sul­tants fi­nal­ize the scope of the project, the De­part­ment of Pub­lic Works said. A de­part­ment spokes­woman said be­hind-thescenes prepa­ra­tions for the project were well un­der­way.

The evolv­ing wish list’s chief com­po­nents in­clude a large new ball­room, an ex­pan­sive out­door ter­race with moun­tain and down­town views atop an ex­ist­ing park­ing garage, and tech­nol­ogy up­grades through­out the cen­ter to ac­com­mo­date emerg­ing event needs.

But in re­sponse to ques­tions from The Den­ver Post, DPW com­mu­ni­ca­tions di­rec­tor Nancy Kuhn cited sev­eral fac­tors that to­gether could drive the fi­nal cost be­yond the es­ti­mate given to the pub­lic in 2015. They start with the dif­fi­culty of un­der­tak­ing an up­ward ex­pan­sion on top of the north­west por­tion of the build­ing. The ad­di­tion also will push the

struc­ture, in­clud­ing the ex­ist­ing build­ing, into high-rise sta­tus in the build­ing code — trig­ger­ing new safety, fire and smoke­con­trol sys­tem re­quire­ments, along with a re-eval­u­a­tion of emer­gency evac­u­a­tion plans.

And then there are the ex­pected lo­gis­ti­cal dif­fi­cul­ties from un­der­tak­ing a ma­jor ren­o­va­tion while the con­ven­tion cen­ter stays open for busi­ness, ad­ja­cent down­town streets han­dle daily traf­fic and a light rail line runs through the build­ing.

The amount of costly steel needed also could af­fect the price. And a la­bor short­age in the Den­ver area’s boom­ing con­struc­tion in­dus­try — a chal­lenge for all big projects — may push costs higher.

Brooks cited another fac­tor: the po­ten­tial need for more for­ti­fi­ca­tion of the ex­ist­ing roof struc­ture to sup­port the load of heavy equip­ment for a kitchen and other ser­vices, seen as nec­es­sary to serve the new meet­ing space. The last large ex­pan­sion, fin­ished in late 2004, in­cluded sig­nif­i­cant struc­tural sup­port in the col­umns and foun­da­tion for an an­tic­i­pated rooftop ad­di­tion — but the build­ing may need other sup­port, Brooks said.

To­gether, all of those is­sues raise the pos­si­bil­ity that city of­fi­cials will need to find new sources of money to cover any cost es­ca­la­tion.

Or they could de­cide to leave some com­po­nents out of the project.

“We have ex­ceeded what we thought we were go­ing to spend on this project, so we’re try­ing to scale back what we want to do,” Brooks said.

He later added: “I think the project is get­ting done — it’s just a ques­tion of pre­mium, midgrade or econ­omy. Ob­vi­ously, ev­ery­body wants pre­mium. How­ever, we’ve got to bal­ance out other needs in the city.”

“Ev­ery day we wait is cost­ing more money”

But the po­ten­tial for a higher cost and the pace of the ini­tial stages have stoked frus­tra­tion among some ho­tel man­agers and oth­ers at­tuned to the con­ven­tion in­dus­try.

“I think Den­ver’s very well po­si­tioned. We just need all of these pieces to come to­gether,” said Amie May­hew, the pres­i­dent and CEO of the Colorado Ho­tel and Lodg­ing As­so­ci­a­tion, who also cited the need for a new large con­ven­tion ho­tel next to the cen­ter. “Ev­ery day we wait is cost­ing more money, and it’s another day that Visit Den­ver can’t be sell­ing a ren­o­vated con­ven­tion cen­ter.”

Tom Clark, the re­tir­ing leader of the Metro Den­ver Eco­nomic De­vel­op­ment Cor­po­ra­tion, helped lead the charge for the ex­pan­sion. In­di­vid­ual con­ven­tion shows are grow­ing larger while the num­ber of prospec­tive shows de­creases, he said, and that dy­namic only height­ens the com­pe­ti­tion among cen­ters.

He shares city of­fi­cials’ view that the rooftop project brings added com­plex­ity com­pared with the last hor­i­zon­tal ex­pan­sion. Still, Clark said: “Like ev­ery­one else, I’m kind of go­ing, ‘Can we get this thing done?’ ”

So far, the city hasn’t set a time­line for fi­nal de­sign or con­struc­tion.

But Kuhn says the project is mov­ing for­ward, hit­ting mile­stones that in­clude hir­ing a project man­ager last sum­mer. City of­fi­cials also se­lected con­trac­tor Tram­mel Crow Co. in Fe­bru­ary for a pro­gram man­age­ment con­tract that will in­clude help­ing to co­or­di­nate the de­sign and con­struc­tion phases.

Of­fi­cially, project man­ager Adam Phipps said through the DPW spokes­woman that it was too early to spec­u­late on how the 2-year-old “rough es­ti­mate” of cost — based on con­cep­tual ideas in ear­lier stud­ies — would com­pare to more de­tailed project plans.

“From the city’s point of view, we do not feel the cost of the project has gone up, as we never thought $104 mil­lion was go­ing to be the ac­tual cost of the ex­pan­sion,” Kuhn said. “The $104 mil­lion num­ber was based on a very pre­lim­i­nary vi­sion — there was not a de­tailed project scope or bud­get in Novem­ber 2015,” when city vot­ers ap­proved the tax ex­ten­sions.

The bal­lot ques­tion, called Mea­sure 2C, had sup­port from Mayor Michael Han­cock and civic and busi­ness lead­ers be­fore it passed with nearly 66 per­cent sup­port from vot­ers. The mea­sure wrapped up tax sup­port for both the con­ven­tion cen­ter ex­pan­sion and the larger Na­tional West­ern Cen­ter project.

Both will ben­e­fit from per­ma­nent ex­ten­sions of 1.75 per­cent por­tions of the city’s car rental and lodger’s taxes that had been due to ex­pire in 2023.

More com­pe­ti­tion on the hori­zon

The Colorado Con­ven­tion Cen­ter’s 2004 ex­pan­sion cost $340 mil­lion, nearly dou­bling the gi­ant struc­ture and adding the 5,000seat Bellco Theatre. The cen­ter now has 584,000 square feet of ex­hi­bi­tion space, rank­ing it 23rd na­tion­ally in a 2015 list com­piled by Trade Show Ex­ec­u­tive — along­side con­ven­tion cen­ters in Phoenix, San Diego, Bos­ton and Salt Lake City.

But its stand­ing has slipped as other cities have un­der­taken large-scale ex­pan­sions or made plans to grow.

And down­town ho­tel man­agers, city of­fi­cials and Visit Den­ver — the con­ven­tion and vis­i­tors bureau that pro­motes the cen­ter to meet­ing plan­ners — are keenly aware that the Gay­lord Rockies Re­sort & Con­ven­tion Cen­ter is al­ready book­ing events past its planned open­ing in late 2018.

The Gay­lord cen­ter, which is un­der con­struc­tion on 85 acres in Aurora near Den­ver In­ter­na­tional Air­port, will have 1,507 ho­tel rooms and 400,000 square feet of meet­ing space. That com­pares with 769,000 square feet of to­tal meet­ing space in Den­ver’s con­ven­tion cen­ter.

“They could do a good per­cent­age of what’s in our build­ing,” said Richard Scharf, Visit Den­ver’s pres­i­dent and CEO.

Den­ver also is in the hunt for the huge Out­door Re­tailer trade show, which is so big that even af­ter the cen­ter’s ex­pan­sion it would re­quire tem­po­rary or off­site venues as a sup­ple­ment.

More flex­i­ble meet­ing space is needed

The new con­ven­tion cen­ter ex­pan­sion is smaller than the 2004 project, but a 2014 mar­ket anal­y­sis by a con­sul­tant por­trayed it as vi­tal to Den­ver’s com­pet­i­tive­ness. The anal­y­sis found a mar­ket need for more flex­i­ble meet­ing space rather than new ex­hi­bi­tion halls, be­cause the cen­ter cur­rently can host 95 per­cent of the coun­try’s trade shows and con­ven­tions, ac­cord­ing to Scharf.

Re­cent dis­cus­sions have fo­cused on build­ing out a large ball­room or other space cov­er­ing as much as 80,000 square feet, with the pos­si­bil­ity for sub­di­vid­ing it.

That and other ameni­ties, in­clud­ing the ter­race, would bet­ter ac­com­mo­date small, medium and large meet­ings and events, Scharf said. The added space also would al­low for large events to hap­pen con­cur­rently, re­duc­ing down­time while crews set up and tear down in event spa­ces — and en­cour­ag­ing more use of the con­ven­tion cen­ter.

Visit Den­ver’s eco­nomic im­pact anal­y­sis es­ti­mates that con­ven­tion cen­ter ac­tiv­ity in 2016 re­sulted in $543 mil­lion in eco­nomic ac­tiv­ity, in­clud­ing ho­tel stays and vis­i­tor spend­ing.

If an ex­pan­sion re­sulted in more book­ings, as ex­pected, that fig­ure would grow by $47 mil­lion a year, the 2014 mar­ket anal­y­sis pro­jected.

A master plan com­mis­sioned by the city set some pri­or­i­ties for the ex­pan­sion, with the most em­pha­sis on the rooftop ex­pan­sion, ren­o­va­tions to some ad­ja­cent spa­ces in the cen­ter and the tech­nol­ogy up­grades.

Af­ter that, the plan also rec­om­mends con­nec­tions from the ter­race to the Sculp­ture Park and the Den­ver Per­form­ing Arts Com­plex. It also eyes im­prove­ments to the cen­ter’s 14th Street frontage, to its drab light rail sta­tion and to the south­east Wel­ton Street side as part of a bid to re­vi­tal­ize that dead street.

But those could wait, both for de­vel­op­ment around the cen­ter to make them timely — the city is work­ing on plans for an over­haul of the DPAC — and for the money to pay for them. The master plan also cites the po­ten­tial of pri­vate part­ner­ships to shoul­der some costs.

Scharf said Visit Den­ver, in­dus­try lead­ers and city of­fi­cials are work­ing to­gether to make the ex­pan­sion a re­al­ity.

“The good news is that ev­ery­body’s on the same page,” he said. “I know that it al­ways ap­pears that it takes a lit­tle longer, be­cause there are so many de­tails that need to be ad­dressed,” given the com­plex­ity. “The ones that you build from the ground up in a field are (eas­ier).”

The $104 mil­lion Colorado Con­ven­tion Cen­ter ex­pan­sion project, part of the Na­tional West­ern Cen­ter tourist tax ex­ten­sions ap­proved by vot­ers in late 2015, is off track both in time­line and cost. The start of con­struc­tion hasn’t been set. Pho­tos by RJ San­gosti, The Den­ver Post

A light rail line runs through the cen­ter, which has 584,000 square feet of ex­hi­bi­tion space. That ranked it 23rd na­tion­ally in 2015.

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