Convention Center Project Cost Overruns Under Scrutiny : Development: The price tag has grown by $16 million. Is the discrepancy significant? It depends who’s doing the figuring.

Construction to expand the city’s convention center had already begun when crews ran into a seawall and pieces of the long-gone Rainbow Pier, underground barriers that were not precisely plotted in construction drawings.

“Everybody knew it was out there somewhere. We just didn’t know where,” city spokesman Ronald A. Walker said.

The old structures had to be removed at a cost of $700,000 so workers could build the cavernous exhibit hall of the Long Beach Convention & Entertainment Center. Portions of the project had to be redesigned as well, project manager James R. Kennelly said.

That problem and a number of other complications have hiked the cost of the expansion by $16 million. The project, estimated to cost $95.5 million when construction started in June, 1992, will now cost about $111.5 million to finish.

Much of the increase was due to problems that pop up in large construction projects, City Manager James C. Hankla said. But some of the increase can be blamed on city officials rushing the project to take advantage of bargain prices from a depressed construction industry, Hankla said.

If there had been less urgency, for example, city officials or consultants could have better surveyed the construction site and discovered the old pier pilings and the seawall. That might have saved some construction and redesign costs, but just how much is unknown.

“You can spend a lot of time and money in preliminary evaluation and know everything about something . . . or you can perceive there’s a window of opportunity,” Hankla said. “It was a reasonable risk.”

The overruns have angered Councilman Warren Harwood.

“It’s halfway done, and it’s $16 million over,” Harwood said in a recent interview. “Is it possible it might go further over?” He called for the city auditor, an independent elected official, to investigate the project.

The City Council declined to authorize the audit, but instead asked Hankla to study the overruns and provide a detailed report to the council by Nov. 9.

Part of the debate centers on the size of the overrun.

Harwood says the $16-million increase, nearly a 17% hike, goes too far beyond what the council approved.

But Hankla considers the overrun much smaller. He points to an April, 1992, memo that indicated the costs of the expansion could jump by $10 million to cover unforeseen costs. Hankla said in a recent interview that he excluded the $10 million from the official cost of the project with the hope that contractors would submit lower bids.

Citing the memo, Hankla figures the base cost of the expansion at $105.5 million, which puts the overrun at $6 million--a 5.4% jump.

“I don’t think the overruns are out of the ordinary,” Hankla said.

The city’s cash-rich Harbor Department, which already has dedicated $80 million to the project, is expected to vote Monday to contribute $10 million to pay for the added expenses. The city’s redevelopment agency and gas department will pay for the rest. The directors of the redevelopment agency approved the financing plan, which still must go before the City Council.

City officials approved the expansion project to enable Long Beach to attract larger conventions and trade shows. A flood of conventioneers would fill Long Beach hotels, restaurants and stores, providing a much-needed boost to the economy.

The expansion will nearly triple the size of the Convention Center, from about 110,000 square feet of exhibit and meeting space to 315,000 square feet. The additional space includes a new ballroom. Completion of the project is expected late next year.

Every piece of major equipment has been installed, including air-circulation units, walls and the roof, the city’s Walker said. It is the finishing work that contractors are working to complete with an average of 260 laborers on the job every day.

In the ballroom, nails litter unfinished concrete, where couples will one day shuffle together across polished floors. Air ducts hang from the ceiling like giant worms.

Great arching windows must be weatherproofed. Colored concrete in wave patterns must be laid along the entrances, and enormous pieces of scalloped plaster must be set into walls and columns.

“It’s going to be the underpinning of the entire downtown area and shoreline for years to come,” said Hankla, who recently released a general description of the increased costs. The upcoming report is to contain more detail.

Of the $16 million, $2 million will go to the Hyatt Regency Hotel under a city agreement to reimburse the hotel for any loss of business due to the construction project. City officials had budgeted $1 million for the Hyatt, which is next to the convention center and has lost the use of its main parking lot during construction. The hotel also has been affected by road restrictions, noise and dust from the project.

So far, the Hyatt has billed the city $2.18 million for lost business due to the expansion project, a city spokesman said.

City officials fear the bill from the Hyatt could exceed $3 million and are looking to cut it down. They are examining the Hyatt’s losses to determine if the construction project is fully responsible. Perhaps the bill can be reduced, Deputy City Manager Henry Taboada said.

“They claimed their disruption was greater than what was anticipated,” Taboada said. “The question becomes, how much is due to disruption, and how much is due to the decline in the business, the economy? We’re attempting to sort through that.”

Hyatt spokeswoman Cheryl Phelps declined to comment.

The additional costs also include construction expenses related to the seawall and Rainbow Pier, as well as improvements to the convention center’s new three-story parking structure. The improvements enable the roof level to be used for large gatherings of people.

Management, architectural and engineering costs also were higher than expected. And the city also is paying more than expected to test steel and concrete for strength.