Outside scrutiny for center
Accounting firm hired to analyze economics of $400M Albany facility
Published on 4/18/2008 by the Times Union written by JAMES M. ODATO, Capitol bureau
ALBANY -- State officials are taking a second look at committing funds to the Albany Convention Center and have retained a consultant to examine the nearly $400 million project.
The state has retained PricewaterhouseCoopers to study the economics of the project, which was estimated to cost $200 million to build when Gov. George Pataki agreed to help finance it with $75 million in taxpayer funds in 2006.
Now, the price tag is projected to be $390 million -- or more depending on interest rates and inflation -- and the Albany Convention Center Authority is asking the state to come up with another $190 million in borrowed funds.
Risa Heller, a spokeswoman for Gov. David Paterson, said the plan to retain PricewaterhouseCoopers started under former Gov. Eliot Spitzer, before Paterson became governor a month ago. The firm was hired at a cost of about $50,000, "to study the financial viability of the convention center under different cost scenarios, given the indications that the cost of the project has increased significantly," she said. The study should be completed in a matter of weeks, she said.
"I had not heard that," said authority Chairman George Leveille. "Great."
He said Pricewaterhouse was one of the consultants the authority proposed to hire before choosing a competitor, HVS, to do a market analysis. The study supported the project.
"The more due diligence everybody does, the more likely we're going to get it right," he said.
If the new study raises questions, it's better to clear up any uncertainties before moving forward, he said.
"We're talking about significant public dollars; we want to be sure we're investing them intelligently," he said.
The $75 million already committed by the state is being drawn down from an account controlled by the state as the authority seeks reimbursements.
So far about $2 million has been spent from the grant, which can only be used for master planning, such as environmental review, economic analysis, historic and cultural research and designs.
Leveille said the key is to have everything in place by June so that construction plans can commence later this year. Otherwise, costs may rise, he said.
Assemblyman John McEneny, D-Albany, a member of the authority board, said he's glad to hear Paterson is engaged in the project.
"It is a state authority, and it seems to be the responsible thing to do," he said. He said he believes Paterson is examining the capital expenditures and operations of many public authorities.
The analysis by Paterson's independent consultants should focus on the question of "who does it benefit?" said Anthony Riccardi, an Albany economist.
"Is it something that ordinarily taxpayers will get $275 million in benefit from?" he asked.
The authority has identified parcels near the Greyhound bus station for the center, a Sheraton Hotel and a parking garage that would be linked to Albany County's Times Union Center.
James M. Odato can be reached at 454-5083 or by e-mail at email@example.com.
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