$288M sought to finish work
New documents show Great Hall contractors requested more money
The fired construction team on Denver International Airport’s terminal renovation estimated before it was cut loose that finishing the work would have taken an additional $288 million — a prospect that would have pushed the project’s budget well over $900 million.
New documents released Wednesday detail those extra cost estimates as part of compensation and delay claims Great Hall Partners submitted in late July. The team also estimated delays on the project stretching about 28 months — which would have pushed completion of the yearold project from November 2021 to February 2024.
But the cost overruns and delay estimates actually reflected slight decreases from Great Hall’s earlier projections. It had disclosed a $311 million estimate to the airport earlier this year. And in June, it projected a delay of 31 to 39 extra months, which could have meant completion as late as 2025.
The renovation project’s original budget was $650 million, as part of Great Hall’s $1.8 billion, 34
year public-private partnership deal with DIA.
That long arrangement also was to include three decades of oversight and maintenance of expanded food and retail concessions in the terminal.
All along, DIA has distanced itself from Great Hall’s cost and delay estimates, while declining to provide its own.
“These were so exaggerated and unrealistic that it was a clear decision to terminate this contract,” said Stacey Stegman, DIA’s senior vice president of communications, on Wednesday evening.
“We can complete the project faster and for less money than what they were asking for.”
In discussing the termination Tuesday, airport CEO Kim Day would say only that the original late2021 target was unrealistic. But she didn’t think it would take as long as Great Hall partners projected, and she promised to keep costs from soaring so high.
Before DIA terminated Great Hall’s contract, the airport had declined to release the July claims at the behest of the contracting team, which cited business confidentiality exceptions in Colorado’s open-records law.
But Great Hall’s stance changed Wednesday, a day after DIA officials made Monday night’s termination decision public. That resulted in the documents’ release by DIA, although with small portions redacted by Great Hall.
The contracting team’s intent was to provide more backing for its long-held position that DIA’s meddling in the project and slowness to make decisions was mostly to blame for the project’s problems. (DIA officials, in turn, accused Great Hall executives of failing to provide timely cost and delay estimates.)
Project changes
The documents cover a dozen compensation and delay claims.
Together, they show Great Hall’s view of the fallout from the discovery last fall of weaker-than-expected original concrete in the main level’s flooring, a concern that halted some work for months but since has dissipated after more testing. Other claims concern about 20 disputed airport change directives involving designs, materials and other elements that the two sides have been warring about.
The cover letter for each claim alleged that despite numerous meetings with DIA’s project team, all decisions on change directives and other major design alterations needed to be made by Day, the CEO, “who is rarely available to issue a decision.”
“The Owner’s refusal to engage in this process is making any proposed (Great Hall) mitigation efforts very difficult to achieve, which means that the problems just keep getting worse,” the cover letter says.
In the claim concerning the concrete, Great Hall alleged that DIA disclosed in November, after the problem surfaced, that the airport “had knowledge of this weak concrete condition well before awarding” the project contract, and long had been monitoring concrete concerns.
On Friday, DIA outright rejected Great Hall’s concrete compensation claim. It still was considering the claim based on the change orders before the termination.
Great Hall Partners is led by Madrid-based Ferrovial Airports, and its equity partners are Centennialbased Saunders Construction and JLC Infrastructure, an investment fund started by former NBA star Earvin “Magic” Johnson and Loop Capital.
All told, Great Hall in its July claims requested $288.1 million in extra compensation, attributing $121.4 million of that to the delays from the concrete issue and $166.7 million to the airport change directives. Those figures are broken down into numerous categories, ranging from labor, equipment and delay-related costs to the loss of future revenues from forecast delays in the opening of concession spaces.
What’s next
DIA’s terminal renovation project calls for relocating security screening from the main floor to the upper level, consolidating airline check-in areas, and revamping most other spaces.
Great Hall’s termination is effective Nov. 12, and DIA based the decision on a “for convenience” clause that allows it to end the contract for any reason.
But doing so will cost DIA a still-undetermined amount that airport leaders say is likely to exceed $200 million, to be covered by dipping into airport funds or financing. Stegman, however, said airport officials were concerned about the potential for more claims lodged by Great Hall.
Now airport officials plan to run a new contractor selection process to finish the job in coming months. Day has said the new contract will be streamlined, covering only construction without the decades of private concessions oversight.
Her goal is to finish the project within the original budget — although that could include tapping into a $120 million contingency fund that was set up to cover any extra costs approved by the airport.
It’s possible DIA will reduce the scope to save money, Day said.