Convention Center's lowest bids total $777 million

When the low bid of $294.5 million was read aloud yesterday for the most costly part of building the Convention Center expansion, officials working on the project felt euphoric relief.

The bid by a joint venture of Daniel J. Keating and Keating Building Construction of Philadelphia is expected to bring the total project cost to about $777 million.

While still $77 million over the original budget for the million-square-foot addition, the good news is it's below the $790 million number that Gov. Rendell said recently could be a deal breaker.

"It was the best news that I've gotten almost since we started this project," one insider said. "And believe me, everybody else feels the same way."

The bid will be scrutinized for adherence to specifications, and Keating must supply an acceptable minority and female business-participation plan.

A second bid of $322.9 million was submitted by a joint venture of Buckley & Co., of Philadelphia, and Walsh Construction, of Chicago.

If Keating's apparent low bid checks out, the contract award will be reviewed by the state and the Convention Center Authority board, project executive Joseph J. Resta said.

Resta said the real impact of the numbers would not be known for several weeks, until the low bid is analyzed. "We have some days and weeks of analysis on the bids that we received today."

After the initial first-phase construction bid came in at $154.89 million, 20 percent above estimates, for concrete and the steel superstructure, officials revised the project's cost up by at least $90 million to $790 million.

Rendell said recently that if bids were "way over," the state might pull the plug on the project. Construction costs are being driven by soaring prices of steel, materials and diesel fuel.

"If the cost is $790 million, I think that's achievable," Rendell said last week.

The state will provide $700 million for the expansion from slot machine revenue. The $90 million shortfall would come from an increase in the city's hotel tax, if approved by City Council.

Center Authority Chairman Thomas "Buck" Riley said a funding plan to cover the overage would require a "great deal of work and cooperation" by the city, the state, and the Convention Center authority.

"It's premature at this point to say it's definitely do-able," Riley said. "If this project is financially do-able, we will need the cooperation of City Council, as it relates to the increase in the hotel tax."

Asked about the bids yesterday, Rendell said he wanted a closer look to make sure the numbers were realistic: "You have to get into the bids and really dig in to make sure there are no kickers," he said, after an unrelated news conference at City Hall. "We won't know for sure until we really get a chance to dig into those and examine those."

Here is what is known now about the costs: Land acquisition and demolition are budgeted at $225 million. But that is not final because a handful of property owners are disputing payment.

The first construction bid, awarded to Keating in June, was $154.89 million. In addition, there are costs for design, construction management, project-related staffing, legal fees, insurance, and financial expenses related to debt service and cash flow to operate the center. Officials have not divulged the price tag for these "soft costs."

After a decade of planning, designing and debate, the expansion would extend the Convention Center from 13th Street to Broad Street, between Arch and Race Streets. It would add about a million square feet of exhibit and meeting space, doubling the size.

The original center opened in 1993 and is bordered by 11th, 13th, Arch and Race Streets, with a wing over the Reading Terminal Market that extends to Market Street.