District of Columbia:
Status of the New Convention Center Project
AIMD-97-17, Dec 20, 1996
Pursuant to a congressional request, GAO reviewed the progress of the new convention center project in the District of Columbia that will be managed by the Washington Convention Center Authority (WCCA), focusing on the project's estimated costs, revenue collections, and financing plans.
GAO found that: (1) since GAO's last report on the new convention center project in February 1996, WCCA has taken steps to develop revised estimates for the predevelopment and construction costs; (2) the total predevelopment and construction costs are now estimated at about $480 million compared to $561 million, an $81 million decrease since the time of GAO's last report; (3) the $480-million estimate consists of predevelopment costs of about $64 million, an increase of about $24 million, and construction costs of about $416 million, a decrease of about $105 million; (4) in addition, WCCA has established a contingency amount of about $70 million, which, if needed, would raise the estimated cost of the project to $550 million, or only slightly less than the earlier estimate; (5) however, the plans for the new convention center are still in their early stages and, thus, the cost estimates are preliminary; (6) WCCA officials stated that construction of the new convention center is scheduled to begin in mid-1997 and be completed by December 31, 1999; (7) as of November 8, 1996, the District had transferred about $64.3 million of dedicated tax revenues to WCCA, and WCCA had earned approximately $1.7 million in interest income on these amounts; (8) WCCA used approximately $14 million of this $66 million to fund operating expenses of the existing convention center, fund expenses relating to the predevelopment costs of the new convention center, and repay amounts borrowed from the District's Rainy Day Fund; (9) although WCCA has not yet decided how to finance the predevelopment costs of the new convention center, it has legislative authority to use revenue bonds backed by dedicated taxes to finance those costs, or it may use those existing revenues to pay the predevelopment costs as they are incurred; and (10) WCCA does not have congressional authorization to use the dedicated taxes to finance the construction costs of the project.