Review of the Economic Feasibility of the Construction and Operation of the Proposed Civic Center in the District of Columbia

GGD-77-58: Published: May 18, 1977. Publicly Released: May 18, 1977.

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Analysis of the District of Columbia's proposal to construct and operate a civic center in downtown Washington did not result in any definitive views on the economic feasibility of the center.

Major areas of vulnerability that were identified included uncertainties about (1) the net additional visitors the District can expect as a result of the center; (2) final construction costs; and (3) the ability of the District to provide for the effective management seen as critical to the success of the center. The net financial benefits to the city will be dependent on the additional visitors the center draws to Washington. The consultant's estimate of between 310,000 and 390,000 additional visitors is far from solid, with anticipated financial benefits being reduced to the extent that this estimate is overstated. The two areas of uncertainty with regard to the final construction costs include the very accuracy of the present $110 million estimate, even if there are no complications, and the ability of the District to overcome a number of potential problems that could result in cost-escalating construction delays. The consultant advised that a year's delay will increase the construction costs by $6 to $8 million, and if the total projected cost of $110 million increases to $120 million or more, the economic feasibility of the center becomes questionable.

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