Independent Accountant Affirms Final Costs for Denver International Airport’s Hotel and Transit Center Within Estimated Range

Published on : Saturday, July 23, 2016

Denver International AirportDenver International Airport (DEN) today announced the accounting results for the airport’s Hotel and Transit Center project. The costs have been verified by an independent accounting firm in a report commissioned by Denver Auditor Timothy M. O’Brien. The auditor’s report (found here) shows the total Hotel and Transit Center cost at $579,424,814 – which is one piece of a larger program of construction that included other capital improvements done concurrently. The report shows that all of the projects, including the hotel, total $714,960,109. Included in this number is $78,700,546 for the capital projects that were accelerated to minimize operational disruptions and take advantage of some concurrent construction efficiencies, as well as $56,834,749 for additional Regional Transportation District (RTD)-related work not included in the original Hotel and Transit Center scope of work. The distinct, but integrated projects are outlined in more detail below.

 

The Hotel and Transit Center includes the 519-room Westin Denver International Airport hotel, a 37,500- square-foot conference center, an 82,000-square-foot open-air plaza, and a train station to serve RTD’s University of Colorado A Line commuter rail to downtown Denver.

 

 

In 2014, at the request of Mayor Michael B. Hancock, DEN completed a comprehensive risk assessment on the project that concluded the final costs of the Hotel and Transit Center could be 5-10 percent over the contracted budget of $544 million that DEN outlined in 2013. The cost of the Hotel and Transit Center, $579,424,814 as concluded by the independent accountants, is 6.49 percent above the contracted budget and within the projected range of the airport’s risk assessment. During the four-year construction program, Colorado saw a strong economic recovery that led to higher costs for materials and labor. Additionally, some unforeseen items and the need to meet RTD’s schedule contributed to the cost increases.

 

 

The original budget for the Hotel and Transit Center included only a portion of the commuter rail train station that DEN anticipated needing to fund. When that cost became disputed, DEN later budgeted a total of $53.2 million to cover that work. The airport’s cost to complete the commuter rail line and train platform area was $56,834,749.

 

 

Separately, DEN began work on other capital improvement projects – such as bridge and road reconstruction – at the same time as the Hotel and Transit Center to minimize disruption to passengers and to take advantage of the efficiencies of having the same contractor do this work. A 2014 performance audit recognized the necessity of these projects regardless of whether the Hotel and Transit Center was built. A separate accounting of this work by BKD concludes those costs were $78,700,546, which was budgeted and paid for by DEN separately from the Hotel and Transit Center.

 

In addition to the above-mentioned costs, there is $3.8 million remaining in the program’s contingency budget for final closeout items that will be spread across the various program elements through 2016.

 

 

“All of us at Denver International Airport are incredibly proud to have delivered a truly unique Hotel and Transit Center that has elevated our place on the world map and created a stunning new front door to the Mile High City for tens of millions of passengers each year,” airport CEO Kim Day said. “We worked diligently to control costs and ended up with a project well within the estimated range of our risk assessment. The capital investments we have made – without using taxpayer dollars – will only boost the airport’s economic importance to all of Colorado and help ensure Denver remains competitive in the evolving global aviation market.”

 

Source:- Denver International Airport

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