State officials pegged the cost of the Jacob K. Javits Center expansion at $1.55 billion in an announcement this week, more than a half-billion more than what Gov. Andrew Cuomo announced in his State of the State speech last year.
In January 2016, Cuomo included a $1 billion redevelopment of the convention center as part of his annual address describing his budget priorities. The additional 1.2 million square feet of exhibit and meeting space would make the Javits Center more competitive with similar destinations around the country, and likely put it in the nation’s top 10 by size.
“It’s going to be a boon to the economy, a benefit to the environment, and it’s going to be self-financed by the Javits Center,” Cuomo said in his State of the State address that year. “That’s what I call a win-win-win.”
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Since then, the source of funding for the project has changed along with the announced cost projections.
At the time of Cuomo’s speech, it was unclear how the Javits Center would be able to pay for the renovations itself. The New York Convention Center Operating Corporation, which runs the facility, did not appear to have enough cash to obtain financing. It did, however, control valuable real estate that could have been sold to fund the project.
But the state later decided not to sell the sites, potentially as a result of the softening market for development parcels, and instead funded the project with $1 billion in state money. This week the state announced that a partnership between Lendlease and Turner Construction Co. was selected from a group of competitors to design and build the project, at a cost of $1.55 billion.
Why the difference? Aside from Cuomo’s announcement coming before any design details had been hashed out, a spokeswoman for Empire State Development said that the governor’s initial $1 billion projection included only so-called hard costs, or the money spent on constructing the building. In the partnership’s actual proposal, those costs came out to $1.2 billion. Soft costs, which include money spent on consulting fees, furniture, insurance and other non-construction line items were included in Tuesday’s projection because they had actually been determined, the spokeswoman said, though no such distinction was spelled out in the announcement. Soft costs are typically estimated at 20% to 30% of hard costs.
The $1 billion allocation from the state budget has remained the same since the spring. The rest is to be paid for through bonds backed by a citywide surcharge on hotel rooms. The price tag for the project is unlikely to rise much further because the state has authorized a design-build plan for the project, a cost-saving measure that puts contractors and designers on the hook for any cost overruns or construction delays.
State officials pegged the cost of the Jacob K. Javits Center expansion at $1.55 billion in an announcement this week, more than a half-billion more than what Gov. Andrew Cuomo announced in his State of the State speech last year.
In January 2016, Cuomo included a $1 billion redevelopment of the convention center as part of his annual address describing his budget priorities. The additional 1.2 million square feet of exhibit and meeting space would make the Javits Center more competitive with similar destinations around the country, and likely put it in the nation’s top 10 by size.
“It’s going to be a boon to the economy, a benefit to the environment, and it’s going to be self-financed by the Javits Center,” Cuomo said in his State of the State address that year. “That’s what I call a win-win-win.”
Since then, the source of funding for the project has changed along with the announced cost projections.
At the time of Cuomo’s speech, it was unclear how the Javits Center would be able to pay for the renovations itself. The New York Convention Center Operating Corporation, which runs the facility, did not appear to have enough cash to obtain financing. It did, however, control valuable real estate that could have been sold to fund the project.
But the state later decided not to sell the sites, potentially as a result of the softening market for development parcels, and instead funded the project with $1 billion in state money. This week the state announced that a partnership between Lendlease and Turner Construction Co. was selected from a group of competitors to design and build the project, at a cost of $1.55 billion.
Why the difference? Aside from Cuomo’s announcement coming before any design details had been hashed out, a spokeswoman for Empire State Development said that the governor’s initial $1 billion projection included only so-called hard costs, or the money spent on constructing the building. In the partnership’s actual proposal, those costs came out to $1.2 billion. Soft costs, which include money spent on consulting fees, furniture, insurance and other non-construction line items were included in Tuesday’s projection because they had actually been determined, the spokeswoman said, though no such distinction was spelled out in the announcement. Soft costs are typically estimated at 20% to 30% of hard costs.
The $1 billion allocation from the state budget has remained the same since the spring. The rest is to be paid for through bonds backed by a citywide surcharge on hotel rooms. The price tag for the project is unlikely to rise much further because the state has authorized a design-build plan for the project, a cost-saving measure that puts contractors and designers on the hook for any cost overruns or construction delays.
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