Disney Hall Is Dusted With Optimism

To borrow on the name of the latest major donor to downtown’s Walt Disney Concert Hall project, Ralphs/Food 4 Less Foundation, can Disney Hall be Built 4 Less?

A $15-million donation announced this week from the Ralphs/Food 4 Less and Ron Burkle, an executive of Yucaipa Cos., allowed Disney Hall officials to reach $52.3 million in new gifts since December, beating by more than two months a fund-raising deadline imposed by Los Angeles County, owners of the land on which the planned new home of the Los Angeles Philharmonic will stand.

Even though the county is relying on estimates that the hall could cost $265 million, Eli Broad, a former developer and the unofficial volunteer chairman of the Disney Hall fund-raising effort, estimates the hall can be built for $220 million, a number that includes $50 million already spent on the project.

Broad, chairman and chief executive officer of SunAmerica Inc., also says this cost containment can be done without any design changes to the hall, an undulating structure of limestone curves designed by Frank O. Gehry. Gehry said Thursday that Broad has told him that $22.5 million in design changes proposed in late 1994 and approved by Disney Hall officials may not be necessary.

Broad confirmed in an interview Thursday that redesign costs could offset any savings on materials or engineering.

The hall currently requires $170 million for completion (that doesn’t count what’s been spent), Broad says. To date, project officials have raised $167.3 million, including the latest gifts. (This figure includes the $50 million that has been spent.)

The bottom line is that if the project can be completed for Broad’s estimate, officials have $117.3 million in hand toward the $170 million needed, leaving only $50 million to be raised--instead of the approximate $100 million needed if the cost were to be $265 million as had been expected.

“It means we already have 70% of the money we need to complete the hall,” Broad said. Indeed, Broad’s estimate differs only slightly from one presented in 1994 by Houston-based Hines Interests management company, an independent firm brought in by the Disney oversight group to calculate costs at a time when spiraling estimates caused Los Angeles County to halt the project and threaten to terminate it. A deadline of June 30 was set to raise $52.3 million as an initial demonstration of support. The hall is to be built on county-owned land at First Street and Grand Avenue, as part of the Los Angeles Music Center.

The Hines estimate assumes design changes that save $22.5 million, including eliminating an amphitheater, simplifying the Founders’ Room and eliminating a horseshoe staircase. These were approved in 1995 by Disney officials and the Music Center board. Hines also suggests that $5 million could be saved by changing the building’s exterior materials from limestone to titanium metal, although this suggestion was tabled by officials.

Broad believes the same amount of money can be made up through cost-effective engineering, fewer consultants and tightly controlled management. Broad said Thursday there is no current plan to eliminate the exterior limestone.

The estimate of $265 million also included substantial expectation of extra costs added by the oversight committee. They include $10 million in unexpected costs, a $10-million reserve to pay off contractors and subcontractors after the project was shut down, another $10 million to finance fund-raising and $17.9 million to cover inflation in case of further delays in construction. All that adds up to $47.9 million.

While one Music Center board member called Broad’s estimate “a little overreaching,” Hines senior vice president Colin Shepherd termed Broad’s number “absolutely attainable” and said the estimate is consistent with previous Hines calculations.

“Our process is geared toward coming in on or under budget. Our projects have all been under budget and on schedule,” he said.

Even developer Stuart Ketchum, a longtime Music Center board member who was part of the Disney Hall group that requested contingency costs be included in the estimates, is optimistic about Broad’s estimates.

“I have not talked to Mr. Broad,” Ketchum said Thursday, “but I think there is a good possibility for substantial savings over the original estimate. The apparent success of fund-raising would reduce some of the need for contingencies for inflation. I think it can be done with very tight controls and management, which it did not have before, but it’s not going to be an easy job.”