Anywhere you go, it's tough to get a precise estimate on the cost of stadium construction. Milwaukee's proposed $250 million baseball park, for instance, has been scaled back after an architect offered a revised projection of $313 million for the initial design. Cleveland's Gateway Project, which includes Jacobs Field, went $28 million over budget. The new ballpark in Phoenix, originally pegged at $278 million, wound up costing $343 million.
So it shouldn't come as any surprise that the preliminary estimate for Houston's new ballpark -- $265 million, including $15 million to buy the land on the east side of downtown -- may be severely out of whack. According to a source familiar with the project, a recent forecast has the costs of the Ballpark at Union Station sailing into the upper deck, months before construction is slated to begin. "I have been told that they were about $70 million over," the source tells Stadia Watch.
If it seems a little early in the game for a 25 percent overrun, it may be because the initial estimate, which includes an expensive retractable roof, was based more on wishful thinking than hard numbers. "I think part of the problem is, somebody pulled the $250 million figure out of the air," says the source.
Dave Walden, the aide to Mayor Bob Lanier who has been handling stadium issues for the city, scoffs at the $70 million figure.
"Whoever told you that is either a third-grade math dropout or just doesn't know what they're talking about," Walden says. "Not a chance in hell."
Walden admits, however, that the price of the ballpark will in fact exceed $265 million. In particular, relocating private utility lines apparently will cost more than first believed. "I think the site's probably gonna be a little more expensive than the [Houston Sports] Facilities Partnership had planned on," he says.
The partnership -- a group of corporations, headed by Enron's Ken Lay, that is fronting $15 million to buy the land and another $18 million in construction capital -- joined the city, the county and Astros owner Drayton McLane in signing a letter of intent last September that outlined each party's stake in the new ballpark (an agreement solidified by the passage of the sports facilities referendum in November). Under the agreement, the city and county are to generate $180 million of the $265 million total, with McLane covering the balance -- as well as raking in all the revenues.
The letter of intent says nothing about cost overruns, though both County Judge Robert Eckels and Mayor Bob Lanier have repeatedly stated that they would be McLane's to bear. "Our position is 100 percent clear," says Walden. "We're responsible for $180 million of that project. Anything above and beyond that is gonna have to come out of somebody else's pocket."
"That's their position," agrees Bob McClaren, the Astros vice president for business operations. McClaren also acknowledges that the price tag is climbing, though he puts the figure at between 5 percent and 10 percent, based on a Brown & Root analysis in April. (He attributes the increase to design details, not utility relocation.) Regardless, he says, the Astros have no intention of covering the excess. "We're not in a position to take on any responsibility for cost overruns, if [there are] any," McClaren says. "Thus far, we haven't come to a consensus on that."
If consensus is to be reached, it'll have to happen by July 15 in order to keep the construction schedule on track and have the Astros playing in the new park by the 2000 season. "That's just a requisite for us," says McClaren.
All parties are currently negotiating a more formal agreement to supplant the letter of intent, though Walden is vague on how binding it will be. "It's a follow-up to the letter of intent that's probably going to be like another letter of intent," he says.
Just who will pick up the tab for the cost overruns is likely to be a key sticking point. To date, neither the city nor county has shown much inclination to play hardball with McLane, who never hesitates to raise the possibility that he might just have to sell the Astros to an out-of-towner if he doesn't get what he wants. Having won commitments from the citizenry and the Legislature, McLane may not be in the strongest position to simply pack up and leave. But with the Oilers gone and an NHL team for Houston on indefinite hold, Lanier and Eckels may not want to risk the fallout of yet another major league team calling it quits in Houston.
-- Bob Burtman
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