Tomorrow is bid day for Philadelphia Convention Center

From Harrisburg to City Hall, officials are waiting - anxiously - to see the numbers tomorrow when bids are opened for construction of a major chunk of the Convention Center expansion in Center City.

A lot is at stake: the projected cost of expanding the center is now expected to be at least $90 million over the $700 million estimate set in 2006, due to soaring construction costs.

"I don't believe we'll be more than $90 million over in the end. I do not think it will be delayed," said Albert Mezzaroba, the outgoing president and chief executive officer of the Convention Center authority.

The state has approved using $700 million from slot machine revenue to pay for the expansion. The $90 million shortfall would be covered by an increase in hotel room taxes, if City Council approves it.

But what if the cost goes even higher? Gov. Rendell said last week that the project was "achievable" at $790 million. Much beyond that, however, he has doubts.

"I'm afraid that with the price of steel and all the things that go into construction, the bids will blow by that," Rendell said.

"If it gets to a point where we can't afford it, we've simply got to pull the plug on it," he said. "If the bids come in and are way over, it does not appear to me we can go forward."

The Convention Center is just one thing on Rendell's mind for tomorrow. He also is set to meet with elected leaders, activists and others to decide if the two Philadelphia slots casinos get built on the Delaware waterfront, as planned, or in some other location.

Officials will not say how high the Convention Center bids would have to be to threaten the future of the project, nor are they likely to say tomorrow if the bids they receive are excessive.

But, if Rendell sounds pessimistic, others are not.

"This project is going to happen," said State Rep. Dwight Evans, chairman of the House Appropriations Committee and a prime sponsor of legislation for the expansion. "I can't answer why he [Rendell] said what he said. At the end of the day, there will be a Convention Center expansion. There will be casinos built. There's too much invested for this not to happen."

The Philadelphia Convention and Visitors Bureau said it had $1 billion worth of conventions "on the books" for the coming years, including three large meetings with an economic value of $93 million in 2011, the year the expanded center is scheduled to open.

Mayor Nutter said: "I don't know why the governor said what he said. It will be a tremendous benefit to the city, the region and the state. It is my expectation that the project will move forward, the building will get built, and we will have a spectacular Convention Center expansion."

Two Philadelphia construction firms will be working the phones through tomorrow morning to take prices from subcontractors vying to erect the roof, walls, plumbing and interior of the 1-million-square-foot expansion.

The bids from a joint venture of Walsh Construction, of Chicago, and Buckley & Co. of Philadelphia, and from a second joint venture of Daniel J. Keating Co. and Keating Building Construction, will be opened by the Pennsylvania Convention Center Authority at 10 a.m. tomorrow.

Here is what is known now about the costs:

Already, the first phase of the project, covering the steel superstructure and concrete, was awarded in June at $154.89 million - about 20 percent over budget.

Separately, land acquisition and demolition costs are budgeted at $225 million, but that is not final because a handful of property owners are in court disputing payment.

In addition, there will be costs for everything from insurance to design and architectural plans. The authority has not disclosed the final price for these "soft costs."

What's driving up construction costs are surging increases for concrete reinforcing bars, structural steel, and diesel fuel - the average price of diesel is close to $5 a gallon. It is not just the cost of fuel to run equipment that is increasing, but shippers and delivery trucks are increasing their rates and suppliers often add surcharges to regular freight.

From December to June, the cost of iron and steel scrap rose 84 percent, other iron and steel products were up 43 percent, asphalt jumped 74 percent, copper 15 percent, and concrete products rose 3 percent, according to the U.S. Bureau of Labor Statistics.

"Everything is much more expensive than it used to be. Steel is noticeably in the forefront of that," said Pierce Keating, president of Daniel J. Keating Co., which won the first-phase construction bid. "A lot of owners, both public and private, are rethinking their projects," he said.

Robert R. Buckley, president of Buckley & Co., cited costs rising across the board, for steel, copper, concrete - and labor, which he said is rising at a rate of about 6 percent a year.

Matt Nolin, estimator for Samuel Grossi & Sons Inc., of Bensalem, said fabricated steel was about $5,000 a ton, up from $4,500 a ton a year ago. Grossi has the $50 million contract for 10,000 tons to build the expanded center's steel framework.

"The steel scrap market has gone through the roof," Nolin said. "Part of it is the Chinese buying so much. Part of it is a slowdown of the auto manufacturers not producing as much scrap."

With the slumping economy and tight credit from capital markets, some private owners are postponing commercial construction projects.

Rendell said last week that he had a "plan" if the bids were too high, but he declined to say what that plan was. He said he had "an idea" to take "one last chance to try to salvage the project" should the bids be far in excess of budget.

"There is no more money in Harrisburg," Rendell said. "We couldn't get much more than $790 million from the state and the city combined. That's No. 1: where can we find the money?"

Would Rendell be willing to leave a gigantic hole in the Center City streetscape should the building be scrapped?

"We could always sell the property to other developers," Rendell said. "That would not be a problem."

But Evans said, "My job is to get this thing done, and we are going to get it done.

"Mayor Nutter is 1,000 percent for it. He's not going to let this fall through the cracks, not when you are looking a gift horse in the mouth of $700 million."