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New convention center hotel may be smaller
Project may have less than 500 rooms to keep cost at $104 million
Friday, March 24, 2006

Because of lengthy funding delays, the Pittsburgh-Allegheny County Sports & Exhibition Authority may cut back on the number of rooms at the proposed convention center hotel to keep the project within its $104 million budget.

Authority Executive Director Mary Conturo said yesterday slashing some of the hotel's 500 rooms is one option being considered as a way to reduce costs and stay on budget.

The authority board approved a contract of up to $7,500 yesterday with Oxford Development Co. to provide consulting on ways to scale back the hotel. One of Oxford's jobs will be to figure just how many rooms would have to eliminated to keep the project within budget.

"Our objective is to stay as close to the 500 as possible," Ms. Conturo said.

The authority finds itself looking to cut costs because of the long delays in financing the hotel. Ms. Conturo said the $104 million budget was set in 2002 and that costs have increased since then.

Developer Forest City Enterprises has pledged $70 million toward the project, but the authority has had trouble coming up with $34 million to fill the gap.

Under the state's slot machine law, $34 million is earmarked for the hotel. The money would come from a $2 billion tourism and economic development fund to be financed through slots revenues.

But the money has been held up because of delays in getting the state's racetrack and stand-alone slots casinos up and running. The first casinos, at racetracks, probably won't start producing revenue until fall at the earliest.

Joseph McGrath, president of the Greater Pittsburgh Convention & Visitors Bureau, said the possible cutback in rooms comes at a time when more and more cities are building larger hotels to compete.

He said at the time local officials began planning the project five years ago that there were 150 hotels in the country with 1,200 or more rooms. The number has "gone crazy" since then, he said, as cities have stepped up their efforts to attract tourism.

The convention and visitors bureau was counting on the new hotel, in conjunction with the 600-room Westin Convention Center hotel next door, to give officials a large bank of rooms to offer potential guests.

Mr. McGrath said he was unsure how a cut in the number of rooms would affect business, saying he would have to poll potential customers to get their reactions. But, he added, it's "not as desirable a thing" as 500.

"It gets to the point of diminishing returns," he said.

Ms. Conturo said she had no idea at this point how many rooms would have to be eliminated. But she said the goal is still to provide a "significant mass of rooms" between the new hotel and the existing Westin.

In addition to looking at eliminating rooms, Oxford will be doing a more detailed analysis of construction costs and looking for areas where savings could be made without affecting the overall integrity of the project.

"We're trying to get the most building for the same budget," Ms. Conturo said.

She did not anticipate any change in the overall design of the hotel as part of the effort to cut costs.

"The project will still have the entrance to the convention center. It will still have the check-in for the hotel, restaurants and the various facilities that go with the hotel, and the room tower," she said.

"We're looking at the same design. It's just a matter of how tall the tower is.

First published on March 24, 2006 at 12:00 am
Mark Belko can be reached at mbelko@post-gazette.com or 412-263-1262.
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