At the Assembly
Panel scrutinizes Dunk renovations
01:00 AM EDT on Wednesday, May 23, 2007

PROVIDENCE — Rhode Island Convention Center Authority officials came under intense questioning last night by lawmakers evaluating their request to borrow an additional $13.4 million to complete the Dunkin’ Donuts Center renovations.
The new borrowing would inflate the project’s cost to at least $75.4 million, a 22-percent cost overrun. That would leave taxpayers paying about $1.1 million a year in additional debt service for 30 years at a time when lawmakers are considering deep cuts to social services to erase a $300-million budget deficit.
“The people of the state can’t keep taking these hits,” Rep. Jan Malik, D-Warren, said at a House Finance Committee hearing. “Something has to be done.”
The committee gave no indication if it will ultimately approve the authority’s request, included in an article in the proposed state budget for the 2008 fiscal year.
But lawmakers were clearly frustrated and flabbergasted by the overruns, and they promised greater scrutiny of the project.
Committee members demanded copies of requests for proposals that resulted in the hiring of construction manager Gilbane Inc., architect Ellerbe Becket and owner’s representative O. Ahlborg & Sons. They also requested the feasibility study Ellerbe conducted in 2004 — with the assistance of Gilbane — that led to the authority’s pledge to complete the project for $62 million.
Last night, authority officials said the actual cost had reached $81.4 million, to be supplemented by a $3-million investment from the private operators of the arena, SMG and Sports Services, and $3 million from a fund typically reserved for the upkeep of the convention center. Including that spending, the project is actually 31 percent over budget.
In their presentation and in documents submitted to the committee, authority officials blamed most of the cost overruns on unanticipated increases in the cost of construction materials, unplanned spending on public safety improvements and a broad expansion of the arena’s accessibility to the disabled.
Lawrence Bacher, the senior project executive for Gilbane, said the price of construction materials generally rises 1 percent to 3 percent a year. In the two years following the feasibility study, he said, the cost jumped about 11 percent.
“It was just unanticipated,” Bacher said. “You need a crystal ball.”
The upgrades to accommodate the disabled exceed federal law, and the efforts to meet the state’s new fire code will make the 35-year-old civic center “one of the safest arenas on the planet,” the authority’s executive director, James P. McCarvill, said.
“Like you, we’re pretty disappointed we have to be here today,” David A. Duffy, the chairman of the authority’s governing board, said. “But we feel our consultants and professionals have performed well under difficult circumstances. We are very proud of our success.”
Despite the cost overruns, Duffy has retained the support of Governor Carcieri, who appointed him to the board and spoke in favor of the new borrowing in an interview last week.
Members of the House Finance committee, however, appear less forgiving.
Last night, they repeatedly questioned why the authority wildly underestimated the cost of construction materials, and why the scale of the fire-safety upgrades was determined long after the original financing request.
“I’m very concerned about the root causes,” Rep. Thomas C. Slater, D-Providence, said. “We knew the price of steel was going up.”
Authority officials suggested that some problems stemmed from their decision to begin renovating before the upgrade was fully designed and the authority had gained ownership of the Dunkin’ Donuts Center, purchased from the City of Providence for $28.5 million.
As a result, the authority did not hire a general contractor to complete the project for a set price, electing instead to pay a construction manager to oversee dozens of separate bids.
That haste may have led consultants to misjudge the condition of the arena, leading to millions of dollars in additional spending.
Duffy praised the progress of the work last night.
But Rep. Steven M. Costantino, the Finance Committee chairman, criticized the authority for putting off installing new seats until all the money had been exhausted, deriding it as a “political strategy.”
“I always thought the seating was one of the top priorities,” said Costantino, D-Providence, interrupting McCarvill. “Now the seating is thrown in this new request.”
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