Pet project now in doghouse

Albany's mayor says convention center he has championed may now be too expensive to build

TIM O'BRIEN Staff Writer
Section: Main,  Page: A1

Date: Thursday, January 31, 2008

Correction: Clarification published February 1, 2008 George Leveille, chairman of Albany's convention center authority board, was the city's community development and planning commissioner in 2002. A graphic accompanying an A1 story Thursday about the proposed Convention Center incorrectly identified Leveille by his current job title in a reference for 2002 cost estimates.

ALBANY - With the estimated cost for an Albany Convention Center climbing to almost $400 million, Mayor Jerry Jennings said Wednesday the project may no longer be viable.


The mayor, who has called the center a key to revitalizing downtown, made his comments after the convention center authority said the project will cost $397.5 million. With state support for the project set at $205 million, the project would require an additional $192 million in funding.





"In light of the challenges we're facing, I think it's only right we take a step back and look at this very, very closely," the mayor said. "There are other priorities in the city."


Jennings said he is asking the state for money to help balance the city's budget and cope with an excess of rundown vacant buildings.


"There is no doubt this is now a very big challenge," he said. "We have to look at this in that context."


Assemblyman Jack McEneny, who serves on the authority's board, is not ready to call it quits.


"This is not a city convention center," he said. "Right now, some of our most significant groups in business, in labor and in public service cannot meet in this, our capital city. This is not a local `pork' project. It's a state authority. I think this is a necessity to function as an efficient state capital."


Projections of the facility's cost have climbed from $150 million in 2002 to $300 million last summer. Authority officials said previous numbers were rough estimates, while the number announced Wednesday is based on a thorough review of costs by both the architect and construction manager.


City officials said they will seek more state aid for the project, but the request would come as the state faces a deficit for 2008-09 of $4.4 billion. Gov. Eliot Spitzer - a Democrat like Jennings and McEneny - has proposed cutting $350 million from aid to education and reducing reimbursement rates for hospitals and nursing homes.


Spitzer spokeswoman Jennifer Givner said the project will be subject to detailed scrutiny.


"We're going to carefully review their proposal. That's the responsible thing to do," she said. "Clearly we can say we recognize the significance of this project. As the governor has reiterated all week long, these are difficult economic times for everyone at all levels of government."


Last year, the state Budget Division asked the authority to find ways to reduce the project's cost, which the authority's board chairman, George Leveille, said would be at least $300 million.


The board meets at 8:30 a.m. Friday on the first floor of the Harold L. Joyce Albany County Office Building, 112 State St.


Mark Hansen, a spokesman for state Senate Majority Leader Joseph L. Bruno, said his office has yet to receive any requests for additional funding. "We'll have to take a look at the costs," he said.


Leveille said the authority board was charged with coming up with a plan to build the center.


"The longer you wait to do it, the higher the cost is going to be," he said. "It certainly would be a greater time to do it if there were large surpluses."


The center would include 244,000 square feet of space, a 400-room Sheraton hotel and an aboveground parking facility with room for 1,100 cars. The authority scrapped plans for a second, smaller hotel and for an underground parking deck.


Downsizing the project would be ineffective, Leveille said, because the hotel must have an occupancy rate high enough to generate the revenue to fund the center's operation.


"If you're going to do it, you've got to do it right," he said. "Now it's up to policymakers to decide what we do about it."


The plan includes a covered pedestrian bridge to the Times Union Center, meant to expand space for trade shows and other exhibits.


The state awarded $75 million outright and allowed Albany to collect a 2 percent increase in hotel taxes. The city also has been given additional state aid it can use for daily expenses but that can also guarantee bonds for the convention center.


Todd Reichelt, general manager for the Albany Marriott, said the bed tax should be dropped if the center is abandoned. Hotel officials had opposed the added tax when it was proposed in 2004 because they were being forced to fund a future competitor.


"It's a great idea for the city. I think we need some quality convention space," he said. "Right from the beginning, the goal of getting it done for $200 million to $225 million was just unrealistic. If they are going to step back and say maybe now isn't the time, I would think it also would be prudent to reduce that (bed tax)."


In November, the authority's board chose Starwood Hotels and Resorts Worldwide Inc. of White Plains to run the hotel, while SMG - which runs the county-owned Times Union Center - was selected to operate the convention center.


For construction to begin, however, the authority needs New York state to contribute significantly more for the facility, said Duncan Stewart, the authority's executive director.


"There would have to be some plan of finance to go forward next year and in the years after," he said.








Tim O'Brien can be reached at 454-5092 or by e-mail at tobrien@timesunion.com.





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****FACT BOX:****


Up, up and up


Here's how the price estimate for the Albany convention center has changed:


April 2002


$150 million: An estimate by George Leveille, chairman of convention center board.


June 2002


$185 million: Leveille says the center could be running in the black within 12 years.


April 2004


Up to $225 million: The state authorizes the project.


January 2006


$200 million: The price at the first meeting of the Albany Convention Center Authority.


June 2007


Closer to $300 million: New estimate by Leveille.


January 2008


$397.5 million: The board says figure more detailed than past estimates.


Source: Times Union archives