Construction costs for Denver’s Justice Center complex are more than $50 million over budget, but city officials say they can absorb the new price.
Project director James Mejia will ask the City Council today to add nearly 25 percent to a $214 million contract the city has with Hensel Phelps Construction Co. to build a courthouse and detention facility.
The increase will not put the project over the $378 million approved by voters, Mejia said.
A combination of contingency funds, interest earnings and premiums from the sale of bonds have allowed the city to weather rising costs for materials that have inflated construction prices industrywide.
“We are in good shape,” Mejia said. “I give a lot of credit to our treasury and finance department that went to the bond market at the right time.”
City officials have avoided releasing details of their financing as they continue to negotiate contracts. Most of today’s meeting will be behind closed doors.
Mejia said the Justice Center design will meet the original plans, despite the expense of construction.
Councilwoman Jeanne Robb, who represents the area, praised Mejia and Mayor John Hickenlooper for pushing favorable deals but said the budget will continue to be “tight.”
“We’ve got to deliver on the program that was promised to the voters – the number of courtrooms, the number of beds,” she said. “And we’ve got to deliver on the quality that was promised. That is pretty darn challenging, given what has happened to construction costs.”
Councilwoman Jeanne Faatz, who is vice chairwoman of the Safety Committee that will hear the presentation this morning, said she wants more details on the assumptions the city is making regarding the interest the project will earn.
“That’s the one that kind of concerns me,” she said. “because you are betting on a future economy. … You can’t take down a wall if you discover you are short, so it’s got to be very conservative.”
Denver voters approved plans for a courthouse, detention facility and parking structure extending Civic Center in 2005. The budget for the project – and the courthouse, especially – has been under scrutiny since famed architect Steven Holl left the project last year.
City officials believed Holl’s designs for the courthouse were more than $30 million over budget. Holl disputed the figure.
Meanwhile, the region has seen construction costs throw other projects over budget. The Regional Transportation District is currently dealing with a $1.5 billion budget shortfall on the FasTracks project because, at least in part, of increased prices for steel, concrete and other materials.
Staff writer George Merritt can be reached at 303-954-1657 or gmerritt@denverpost.com.
