Over-budget bid stalls convention center planning.

Over-budget bid stalls convention center planning

Expansion plans for the Los Angeles Convention Center -- already suffering from a two-year delay -- suffered another possible setback April 25 when the low bid for the $243 million construction project came in $43 million over budget.

Dick Walsh, Convention Center general manager, said the expansion project is still slated for a July 1993 completion date. However, project planners are scrambling to find a quick solution to the bid crisis.

City Administrative Officer Keith Comrie said efforts are being made to see if costs can be cut to bring the $287 million bid by Maryland-based Hyman/Mortensen into line with the city's budget. "If not, we'll probably have to go back out to bid," Comrie said.

Walsh pointed out that members of the expansion plan steering committee talked about putting the project back out to bid immediately. But estimates often come back higher when projects are rebid. The plan could be redesigned before being put back out to bid, he said. But that would further postpone a project that is considered an important key to reversing the city's abysmal record for attracting lucrative, major conventions.

Walsh said he could go before the City Council and request additional funding, but there is no guarantee council members will want to commit more money to a project that already has a total price tag of $390 million.

Steering committee members will announce their next move at their May 31 meeting.

Both Walsh and Comrie were unsure why the bids came in so far above the plan's budget.

Chris Simons, senior project coordinator, said the city hired two of the top cost estimating firms in the state to arrive at its project estimate. He speculated that the majority of the bid-budget deficit can be attributed to current market conditions.

Simons noted that there was only a 5 percent difference among the four bids the city received. Newberg/Dick bid $287.7 million but was disqualified because its bid was received past deadline. Taylor-Woodrow bid $302 million and PCL/Kiewit bid $303 million.

Neither Walsh nor Comie received any formal reaction from Mayor Tom Bradley. Frustrated by the project delays, Bradley sent Comrie a strident letter back in December that advised steering committee members to "anticipate potential difficulties before they become full-blown problems."

In 1985 the city issued $350 million in bonds to finance the Convention Center expansion. At that time bond documents referred to a December 1990 completion date. In September of last year the completion date was changed to 1992. Seven weeks later the completion date was pushed back even further, to mid-1993.

Convention Center officials said the postponements were attributable to "normal delays" caused by plan revisions.

Other setbacks suffered by the city's struggling tourism industry include the collapse of a proposal to build the Pacific Basin Plaza Hotel across Figueroa Street from the Convention Center.

For the past two years, Mayor Bradley and officials from the Los Angeles Community Redevelopment Agency, argued with Calmark Holding Corp., a Westside developer, about the scope of the project and the amount of city money it would receive.

Calmark envisioned a $450 million, 1,781-room hotel with 500,000 square feet of office space.

However, after nearly nine months of negotiations, the CRA decided Calmark was ill-prepared to build the complex.

During talks with the city, major Calmark subsidiaries declared Chapter 11 bankruptcy and the company's purchase options on the hotel site expired.

Ohbayashi America, the Los Angeles subsidiary of Tokyo-based construction giants, owns roughly two-thirds of the land where the complex was to rise. That area is bounded by Figueroa, 12th and Flower Streets and Pico Boulevard.

Ohbayashi officials have refused to comment on their plans for the property. However, Convention and Visitor Bureau President George Kirkland has said he believes the construction giant will build a hotel on the site.

That would be good news to downtown Los Angeles businessmen who have suffered from the ill-fated Pacific Basin project.

Los Angeles is the nation's second-largest city but has missed out on major conventions because of the lack of accommodations for large groups of visitors. What concerns downtown hoteliers, restaurateurs and retailers is that the trend will continue unless the Convention Center is expanded and a larger hotel inventory constructed in the downtown area.

Los Angeles has 25 conventions booked through 1994. By contrast, Anaheim, which has a much larger convention center and hotel inventory, has booked 142 national conventions through 1994.

PHOTO : Convention Center: Expansion lags; bids zoom