ST. LOUIS — City and county leaders on Monday approved the lone bidder on the first phase of a long-planned downtown convention center expansion, despite the bid coming in $40 million over budget.
A panel of St. Louis, St. Louis County and tourism officials voted unanimously for St. Louis County-based Ben Hur Construction Co.’s $124 million bid, 50% more than project planners had anticipated and well beyond what the city has in the bank from its bond sale in 2020. The resolution approved by the panel called for finalizing a contract with "negative change orders" at a "minimum" of $8 million "in which the scope of the project will not change."
Change orders are mostly used by contractors when costs exceed their estimates. But even if $8 million is shaved off the initial contract price, it would still represent a 40% increase over the $83 million that the city’s procurement office, which is handling the bidding, estimated for the first half of the physical construction.
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Craig Lucas of Kwame Building Group, the project manager, said inflation, supply chain disruptions and the war in Ukraine “have had a real negative impact on the market in terms of bidding construction out.â€
Nonetheless, he said he recommended going with the “lowest responsible bidder†for the project.
“Based on what’s going on in the market, we don’t feel that there’s any value to going out and rebidding or trying to get another bid,†Lucas said. “We don’t think that either will yield additional bidders or a more favorable bid.â€
After going into closed session to discuss the project, members emerged and revealed the Ben Hur bid. Â
St. Louis County Councilman Ernie Trakas, a longtime critic of the project, said last week that he had heard only one bid was submitted for the project and it was 50% higher than advertised. City officials and those with the Convention and Visitors Commission, the project’s main backer, declined to comment on the allegation, citing a bidding process that wasn’t completed.
The expansion of America’s Center, on the drawing board for four years, was contemplated as a joint project with the city and the county each picking up half the tab, or $105 million each.
But St. Louis County has yet to give final approval to its share of bonds. St. Louis County Council Chair Rita Heard Days has held up a final vote while she has pushed to fund a recreation center in north St. Louis County, a project she and others say was part of a deal made for the county’s support of the convention center project.
Days has promised a final vote Tuesday on a county bond package that adds $40 million for the rec center to its share of the convention center.
The Convention and Visitors Commission, which is funded by hotel taxes and led by a board of hotel and tourism interests, operates America’s Center. Leaders envision diverting the $6 million in hotel taxes the city and county each paid on the bonds issued to build The Dome at America’s Center — the former home of the NFL Rams that was just paid off last year — to cover the new debt issued to expand the convention center.
The CVC, known as Explore St. Louis, is under pressure to have the convention center ready by late 2023, in time for groups to whom it has already promised the space. Delays at the County Council make that construction deadline difficult to meet. Earlier wrangling in the city about which office would control the bond issue also delayed the financing, as did the outbreak of the coronavirus that slammed hotel receipts.
The second half of the project’s construction is already out to bid with responses due May 3. The city’s Bureau of Public Service estimates the second phase to cost $70.1 million.
It’s unclear how the ballooning construction costs will affect the project, or whether the city or county will have to take on additional debt to finance the expansion. The city has already used $5 million of its bond proceeds to buy a parking garage in the footprint of America’s Center that tourism officials have long wanted, and it’s also purchased other real estate and demolished another parking garage to make way for the expansion.
The project has strong support from organized labor and hotel and tourism businesses. Mayor Tishaura O. Jones and St. Louis County Executive Sam Page have also voiced support for the project, though officials left it unclear how the project could remain within its $210 million budget given the higher costs.
A spokesman for Jones said that the county had already passed a measure committing it to cover half the expansion project, “and the City looks forward to them issuing bonds to cover the costs.â€
Kitty Ratcliffe, head of the CVC, said the county was “legally obligated†to cover half of the project costs. She said the project “isn’t being scaled back†and the “bid award decision today will deliver what it has been specified to deliver,†which adds loading docks and expands exhibit hall space along Cole Street on the site of the recently demolished parking garage.
St. Louis Comptroller Darlene Green’s office, which chairs the coordinating council and oversaw the city’s $105 million bond issue for the project, did not respond to a question about whether the city had the capacity to issue more debt if the project needs it.
But after the joint city-county-CVC panel, LaTaunia Kenner, who represents Green and chairs the panel, said the bid award was a “long time coming.â€
“We all know the convention center is the economic engine for the city,†she said. “I can’t wait for groundbreaking.â€
Editor's note:Â This story was updated to reflect that the resolution to finalize a contract with Ben Hur called for "negative change orders" of at least $8 million "in which the scope of the project will not change."