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December 3, 2007
Rising costs may reduce size of Downtown hotel
Pittsburgh Post-Gazette
By Mark Belko
In Pittsburgh, Forest City is faced with having to downsize a Downtown hotel project before construction begins, due to rising construction costs.
Mary Conturo, executive director of city-county Sports & Exhibition Authority, said the hotel likely will end up at less than the 500 rooms envisioned when the $104 million budget was set in 2003.
"I would not be surprised if it were below that considering the time that has passed and just considering the escalation in cost since we started working on this," she said.
The authority is expected to meet with Cleveland developer Forest City Enterprises early next year to discuss possible alternatives in scaling back the size of the hotel.
...
the project continued to be delayed because of a $34 million funding gap. That was not resolved until last summer, when the state Legislature authorized a $34 million subsidy for the hotel to be paid out of a slots-financed development fund. Forest City is putting up $70 million.
NoLandGrab: We're curious to see if politicians will publicly admit that a reduction of the size of the project will jeopardize the economic benefit to the city.
This is also something to keep an eye on here in Brooklyn — rising costs and market conditions could result in long delays and/or huge alterations to the project plan, resulting in serious changes to the the amount of jobs and affordable housing created and net benefit (if any) to the taxpayer.
Posted by lumi at December 3, 2007 5:09 AM