PRINTER'S NO. 3612
No. 609 Session of 2006
INTRODUCED BY PETRARCA, CALTAGIRONE, CLYMER, CRAHALLA,
HENNESSEY, HERSHEY, JAMES, PALLONE, ROBERTS, SIPTROTH, THOMAS
AND YOUNGBLOOD, MARCH 6, 2006
REFERRED TO COMMITTEE ON RULES, MARCH 6, 2006
A RESOLUTION
1 Directing the Legislative Budget and Finance Committee to
2 perform a study of the extensive cost overruns relative to
3 the construction of the University of Pittsburgh's Petersen
4 Events Center.
5 WHEREAS, From start to finish, construction costs for the
6 University of Pittsburgh's Petersen Events Center more than
7 tripled from $35 million to more than $119 million, with public
8 tax dollars contributing $66 million of the cost; and
9 WHEREAS, According to the initial agreement between the
10 Commonwealth and the University of Pittsburgh, aside from the
11 Commonwealth's allocation of $13 million, the Commonwealth would
12 not make any additional funds available to the project under any
13 circumstances, and the university would be responsible for all
14 extra expenses or it would redesign the building to conform to
15 the budget; and
16 WHEREAS, Due to project delays and further additions,
17 taxpayers committed an additional $7.2 million in 1994 and an
18 additional $25 million in 1997, totaling the taxpayer's cost of
1 the facility as $45.2 million; and
2 WHEREAS, After allocating $45.2 million for the project, the
3 university handed over control of the project to the Department
4 of General Services and requested that the project be completed
5 by October 2001, the start of the fall basketball season; and
6 WHEREAS, Choosing a more expensive $69.8 million construction
7 estimate plan submitted by Pitt Center Partners, the department
8 rejected a plan submitted by Apostolou/Rosser costing $64.6
9 million as the project got closer to groundbreaking; and
10 WHEREAS, It was found that officials continued to cite the
11 $69.8 million estimate for the next two years, although it was
12 clear that construction costs continued to drastically increase
13 to a cost of at least $84 million, with spending continuing to
14 soar after that; and
15 WHEREAS, In April 2002 the university held an open house to
16 showcase the Petersen Events Center before completion, which
17 open house cost $122,000; and
18 WHEREAS, Significant construction needed for completion
19 occurred in the later spring; and
20 WHEREAS, Altogether, it was found that during nearly two
21 years of design and another two years of construction, the
22 Commonwealth spent $28.5 million in contract amendments, change
23 orders and claims settlements, resulting in a 34% overrun, a
24 rate construction experts say is two to four times higher than
25 normal; and
26 WHEREAS, Many contractors, dissatisfied with their
27 compensation from the Commonwealth over settlement claims, sued
28 for additional money, which litigation cost the Commonwealth
29 $5.6 million to settle claims with 18 firms originally
30 requesting $15.2 million; and
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1 WHEREAS, Recent leaks and structural flaws in the roof of the
2 Petersen Events Center will require extensive repairs, costing
3 $5.6 million; therefore be it
4 RESOLVED, That the House of Representatives direct the
5 Legislative Budget and Finance Committee to perform a study of
6 the extensive cost overruns and project mishandling relative to
7 the construction of the University of Pittsburgh's Petersen
8 Events Center; and be it further
9 RESOLVED, That the study concentrate on: (1) why the
10 legislature and the Governor released the University of
11 Pittsburgh from its promises to pay for all costs beyond the
12 original State allocations, (2) whether the cost of the project
13 was deliberately set at a low construction cost in order to
14 secure State financing, (3) why costs increased so quickly
15 during the project's delay in the late 1990s, (4) who made the
16 official decision to nearly double the size of the facility from
17 230,000 to 430,000 square feet, (5) why the Commonwealth decided
18 to hire 25 prime contractors when the law only requires the
19 hiring of four "prime contracts" on every nonhighway State
20 project, and (6) why more oversight was not provided by
21 Commonwealth officials; and be it further
22 RESOLVED, That the Legislative Budget and Finance Committee
23 report its findings and recommendations to the House of
24 Representatives as soon as possible.
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