Exploding costs

Exploding costs

Rose Bowl officials to meet with partners over $35-million stadium deficit

By André Coleman , Kevin Uhrich 06/14/2012

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Less than three weeks away from the annual Americafest fireworks show at the Rose Bowl, stadium officials are trying to figure out a way to quell an exploding deficit which could delay the ongoing renovation of the historic stadium.

On Monday, the Finance Committee of the City Council instructed Rose Bowl officials to meet with their partners from the Tournament of Roses Association and UCLA and ask them what they can do help close a $35-million deficit which has increased the cost of the renovation project from $152 million in 2010 to a whopping $175 million today.

“They have to go back and figure out a way to come up with the gap,” said Finance Committee Chair Chris Holden. “They may have to delay or cut out parts of the project. There’s not a lot of magic we can do because of where we are. The project is out of balance. We had a deficit before we got started and all it has done is grow. They have to sit down with their partners at the Tournament of Roses and UCLA and figure out what each will do to help, and then they will come back to us and let us know if they are going to delay or eliminate parts of the project.

“It’s what you would expect when you remodel a home or the Rose Bowl,” Holden said. “You find issues along the way.”
The costs began to rise after bond revenue fell short by $12 million and construction costs continued to rise due to an unorthodox bidding process. Instead of accepting bids for all three phases of the project, city officials have accepted bids one phase at a time so that they can meet a Jan. 1, 2014, completion deadline. Had they done all of the bidding at once, the project would not have started until after the completion deadline.

The current stage of the project was supposed to cost about $26 million, but according to the Rose Bowl Operating Co., it will now cost $37 million due to upgrades of the stadium’s outdated electrical system and problems with the foundation at the facility, which was built in 1922. Stage 3 also includes widening the stadium tunnels, which do not meet modern earthquake codes.

“We have contractual obligations to the Tournament of Roses and UCLA,” said Councilman Victor Gordo, who serves as the city’s representative to the Rose Bowl Operating Co.

“We are starting from the point of view that we are going to meet them and the sentiment from the RBOC and the city side is we are going to complete this project and we are going to complete it right, but we are going to do it in a way that is fiscally responsible. We are going to sit down with our tenants and see how we are going to complete those three goals.”

After stadium officials make a decision, they will come back to the Finance Committee, which will forward a recommendation to the City Council. That is expected to happen within a month, according to Holden.

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Comments

Is this going to become one of those time-honored circumstances of predatory capitalism where some privately-administered operating company collects most immediate revenues and future community profits while the majority of local taxpayers "deep-pocket" absorb any prevailing deficit?

DanD

posted by DanD on 6/14/12 @ 09:20 p.m.

I wonder, does the RBOC get any brand of city-sponsored credit cards?

DanD

posted by DanD on 6/15/12 @ 01:51 p.m.

"... city-sponsored" = taxpayer-financed.

DanD

posted by DanD on 6/16/12 @ 01:57 p.m.
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