Panel Backs Convention Center Plan Despite Cost

A special mayoral task force recommended Wednesday that San Diego’s waterfront convention center be built immediately despite a projected $22-million cost increase, largely due to fears that rebidding would further delay the project and ultimately save little, if any, money.

By a 12-2 vote, the panel encouraged the San Diego Unified Port District to award a construction contract by May 18 to one of the six firms that last month bid on the project, despite the fact that those bids were more than 20% over the port’s $101.5-million budget.

The panel, established last month by acting Mayor Ed Struiksma, rejected Struiksma’s recommendation that the project be rebid in an attempt to trim costs.

“I really did not expect to hear what I heard today,” Struiksma said. “But to the credit of the task force . . . it shows me a lot of integrity as to how they viewed the process.”

Wednesday’s vote represented at least a temporary victory for tourism industry officials, who vigorously lobbied for the immediate construction of the center, arguing that any savings in building costs that might be achieved through rebidding would be outweighed by the loss of even more money in convention business. The task force also recommended that the Port District hire a construction manager to oversee the project.

The San Diego City Council is scheduled to make its own recommendation on the issue next week. The final decision on whether to proceed with or rebid the project rests with the Port District, which will finance construction of the 1.4-million-square-foot structure on Navy Field, adjacent to Seaport Village and the Hotel Inter-Continental.

If the council adopts the task force’s recommendation next week, it could create strong pressure on the port to immediately proceed with the project. Three of the port’s seven commissioners represent the City of San Diego, and presumably those members will be heavily influenced by the council’s position.

In addition, Chula Vista City Councilman David Malcolm attended Wednesday’s meeting and said that his city, represented by one port commissioner, is “very supportive and wants to see the convention center go ahead.” If Chula Vista’s position holds, that could produce a majority of votes in favor of immediately awarding a construction contract to last month’s low bidder.

The task force’s one-sided vote Wednesday was a marked contrast to the nearly 50-50 split at its last meeting, when two subcommittees presented the panel with diametrically opposed recommendations--one urging that the project proceed expeditiously despite the higher-than-expected costs, while the other group favored rebidding in an attempt to reduce construction expenses.

Last week, a group of architectural and construction experts told the task force that rebidding could save nearly $10 million while delaying the project by only about four months. However, tourism officials countered Wednesday by pointing out that a four-month delay would result in the loss of more than $40 million in convention business.

Tourism officials, as well as downtown business leaders, also emphasized that a second round of bidding would not guarantee a lower price. They characterized the estimated four-month delay as an optimistic target unlikely to be met.

“There’s always the possibility that if we have a rebid, the prices could come in even higher,” said Jim Granby, president of the convention center’s board of directors. “If that is the case, all we’ve really gotten is a delay, and that delay could lead to other delays.”

Those arguments were persuasive even to the construction experts, leading them to place greater emphasis on the potential loss of convention business than on the possibility of cutting construction costs.

“From a narrow point of view, there’s money to be saved,” said Steve Williams of Trammel Crow Co. “But you wonder what the loss of (convention) income would be. Maybe the best thing is just to go forward, because there are no guarantees on the cost savings side.”

Contractor Dean Dunphy explained the construction experts’ change in position by saying that they “traded their construction hats . . . for their citizen-advocate hats.”

“From a construction expertise standpoint, the probability exists, not the guarantee, that you’d get lower bids if you rebid,” said Dunphy, former president of the Centre City Development Corp., the city’s redevelopment arm. “But from a citizen-advocate viewpoint, I’ve been a convention center believer for a long time and I think we should go ahead.”

In the end, only Struiksma and lawyer John Davies, former chairman of the city’s Planning Commission, argued in favor of rebidding the project.

Reiterating a position that he announced last weekend, Struiksma argued that because “we’re dealing with a substantially different number” than the $95-million cost cited during the 1983 campaign in which San Diegans approved the convention center in an advisory vote, any effort to reduce costs should be pursued.

Noting that convention center proposals have been the subject of community debate for more than a decade, Davies said: “Forgive me if I’m not impressed by another two months’ (delay).”

While the rebidding would take about four months, excavation of the site is not expected to be completed until mid-June, reducing the practical delay to only about two months, according to architect Paul Buss.

Davies also argued that even though rebidding might cause the cancellation of already-booked conventions, “the loss of anticipated profits is not the same thing as a waste of port funds.”

The controversy over the convention center’s rising costs was touched off last month when the port received six construction bids ranging from $123.9 million to $133.7 million--about $22.4 million over the port’s budget for construction. Port Commissioner William Rick has explained that excavation, utilities, furnishings and other costs could push the center’s final cost to nearly $160 million.

The task force members who argued in favor of quickly proceeding with the project noted that the convention center’s architects and other experts have predicted that minor design changes could reduce construction costs by about $6 million. However, because the port cannot negotiate with a contractor until after a construction contract is awarded, the contractor would not be obliged to go along with any suggested cost-cutting changes.

But with the $10-million savings said to be possible through a rebid also far from certain, the task force decided that proceeding with the project is preferable to a rebidding delay.