[House Hearing, 107 Congress]
[From the U.S. Government Publishing Office]





            STATUS OF CONSTRUCTION OF THE CONVENTION CENTER

=======================================================================

                                HEARING

                               before the

                SUBCOMMITTEE ON THE DISTRICT OF COLUMBIA

                                 of the

                              COMMITTEE ON
                           GOVERNMENT REFORM

                        HOUSE OF REPRESENTATIVES

                      ONE HUNDRED SEVENTH CONGRESS

                             SECOND SESSION

                               __________

                            JANUARY 18, 2002

                               __________

                           Serial No. 107-136

                               __________

       Printed for the use of the Committee on Government Reform


  Available via the World Wide Web: http://www.gpo.gov/congress/house
                      http://www.house.gov/reform

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                            WASHINGTON : 2002
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                     COMMITTEE ON GOVERNMENT REFORM

                     DAN BURTON, Indiana, Chairman
BENJAMIN A. GILMAN, New York         HENRY A. WAXMAN, California
CONSTANCE A. MORELLA, Maryland       TOM LANTOS, California
CHRISTOPHER SHAYS, Connecticut       MAJOR R. OWENS, New York
ILEANA ROS-LEHTINEN, Florida         EDOLPHUS TOWNS, New York
JOHN M. McHUGH, New York             PAUL E. KANJORSKI, Pennsylvania
STEPHEN HORN, California             PATSY T. MINK, Hawaii
JOHN L. MICA, Florida                CAROLYN B. MALONEY, New York
THOMAS M. DAVIS, Virginia            ELEANOR HOLMES NORTON, Washington, 
MARK E. SOUDER, Indiana                  DC
STEVEN C. LaTOURETTE, Ohio           ELIJAH E. CUMMINGS, Maryland
BOB BARR, Georgia                    DENNIS J. KUCINICH, Ohio
DAN MILLER, Florida                  ROD R. BLAGOJEVICH, Illinois
DOUG OSE, California                 DANNY K. DAVIS, Illinois
RON LEWIS, Kentucky                  JOHN F. TIERNEY, Massachusetts
JO ANN DAVIS, Virginia               JIM TURNER, Texas
TODD RUSSELL PLATTS, Pennsylvania    THOMAS H. ALLEN, Maine
DAVE WELDON, Florida                 JANICE D. SCHAKOWSKY, Illinois
CHRIS CANNON, Utah                   WM. LACY CLAY, Missouri
ADAM H. PUTNAM, Florida              DIANE E. WATSON, California
C.L. ``BUTCH'' OTTER, Idaho          STEPHEN F. LYNCH, Massachusetts
EDWARD L. SCHROCK, Virginia                      ------
JOHN J. DUNCAN, Jr., Tennessee       BERNARD SANDERS, Vermont 
------ ------                            (Independent)


                      Kevin Binger, Staff Director
                 Daniel R. Moll, Deputy Staff Director
                     James C. Wilson, Chief Counsel
                     Robert A. Briggs, Chief Clerk
                 Phil Schiliro, Minority Staff Director

                Subcommittee on the District of Columbia

                CONSTANCE A. MORELLA, Maryland, Chairman
TODD RUSSELL PLATTS, Pennsylvania    ELEANOR HOLMES NORTON, Washington, 
THOMAS M. DAVIS, Virginia,               DC
------ ------                        DIANE E. WATSON, California
                                     STEPHEN F. LYNCH, Massachusetts

                               Ex Officio

DAN BURTON, Indiana                  HENRY A. WAXMAN, California
                     Russell Smith, Staff Director
                          Matthew Batt, Clerk
                      Jon Bouker, Minority Counsel


                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on Janaury 18, 2002.................................     1
Statement of:
    Franzel, Jeanette M., Acting Director, Financial Management 
      Assurance Team, GAO; Harold Brazil, chairman, Committee on 
      Economic Development, Council of the District of Columbia; 
      Eric Price, deputy mayor, planning and economic 
      development, District of Columbia Government; Lewis H. 
      Dawley III, general manager/CEO, Washington Convention 
      Center Authority; and Dr. Natwar Gandhi, chief financial 
      officer, District of Columbia..............................     7
Letters, statements, etc., submitted for the record by:
    Brazil, Harold, chairman, Committee on Economic Development, 
      Council of the District of Columbia, prepared statement of.    21
    Dawley, Lewis H., III, general manager/CEO, Washington 
      Convention Center Authority, prepared statement of.........    28
    Franzel, Jeanette M., Acting Director, Financial Management 
      Assurance Team, GAO, prepared statement of.................    10
    Gandhi, Dr. Natwar, chief financial officer, District of 
      Columbia, prepared statement of............................    39
    Norton, Hon. Eleanor Holmes, a Delegate in Congress from the 
      District of Columbia, prepared statement of................     5
    Price, Eric, deputy mayor, planning and economic development, 
      District of Columbia Government, prepared statement of.....    49

 
            STATUS OF CONSTRUCTION OF THE CONVENTION CENTER

                              ----------                              


                        FRIDAY, JANUARY 18, 2002

                  House of Representatives,
          Subcommittee on the District of Columbia,
                            Committee on Government Reform,
                                                    Washington, DC.
    The subcommittee met, pursuant to notice, at 9:10 a.m., in 
room 2154, Rayburn House Office Building, Hon. Constance A. 
Morella (chairwoman of the subcommittee) presiding.
    Present: Representatives Morella and Norton.
    Staff present: Russell Smith, staff director; Heea 
Vazirani-Fales, counsel; Robert White, communications director; 
Matthew Batt, legislative assistant/clerk; Shalley Kim, staff 
assistant; Jon Bouker, minority counsel; and Jean Gosa, 
minority clerk.
    Mrs. Morella. Good morning. I am ready now to convene the 
District of Columbia Subcommittee hearing, and this morning we 
are going to look at the status of construction of the 
convention center.
    You know, just a few blocks from here where we are 
gathered, the most important public works projects in the 
District of Columbia is nearing completion. When it is 
finished, the new District of Columbia Convention Center will 
consist of 2.3 million square feet of space, a third of which 
is dedicated for exhibits. It will be the second largest 
building in Washington, behind only the Ronald Reagan 
International Trade Center.
    But, more importantly, the new convention center will be 
one of the sixth largest convention centers in the country, 
once again giving the District the ability to attract major 
exhibitions as well as the tourism dollars that follow them.
    There is no more vital project now underway in the District 
than the convention center. This has become even more evident 
in the aftermath of September 11th, when the importance of 
business and tourism travel to the economic health of the city 
became painfully clear to all of us. That is why, immediately 
after receiving the General Accounting Office's status report 
on the convention center project, I figured that we needed to 
hold this hearing.
    Some of the findings in the GAO report were quite worrisome 
to me. I feared some of the controls put in place to protect 
this project are not being fulfilled. For instance, although 
utility relocation and excavation work began back in 1998, with 
construction of the building beginning a year later, the GAO 
reported that there still is no revised guaranteed maximum 
price or the GMP for the project. The GMP is supposed to ensure 
that project's costs are contained. How are you supposed to 
control costs when you don't have a final budget to work with?
    At the time of the GAO report, there was a $135 million 
difference between the total cost estimates of the construction 
manager, Clark/Smoot, and the Washington Convention Center 
Authority. This difference stemmed from change orders in the 
project that were submitted but not yet approved. These changes 
were not reflected in the Authority's projected total cost of 
$778 million dollars. Since then, I understand the Authority 
has adjusted its estimate to $799 million.
    But, you know, cost is not the only disputed figure. As the 
GAO reported, the builder and the Authority also differed 
greatly in their projected completion dates, with the Authority 
contending it will be finished on schedule next spring, and the 
construction manager saying it could take up to a year later.
    Now, I understand there is a feeling that the convention 
center will be ready to open by next March, although some work 
will continue past that date. So that is why we are holding 
this hearing. There are too many unanswered questions, too many 
differences at this late stage in the game for us to have a 
high level of comfort with the progress of the project.
    I hope Mr. Dawley and our other guests can shed some more 
light on the budget, funding, and timing of this vital project. 
And I sincerely hope that Mr. Dawley will tell us that the GMP 
is on the verge of being signed by all parties. We have heard 
such promises before. But I want to state for the record that I 
strongly encourage the principals to get the GMP signed within 
30 days or they can expect to be back before the subcommittee 
for another hearing.
    In closing, let me read something from the Temple Group 
which has been providing status reports on the convention 
center to the city council, ``an updated construction schedule 
which incorporates status of the work in the field, production 
and manufacture, and labor availability for all trades is a 
critical priority as a planning tool to assure meeting the 
project objectives, timing and goals.''
    This was written in October. The report then suggested if 
the new schedule and budget cannot be finalized within a few 
weeks, an independent assessment of the project might be in 
order. I trust that in the intervening weeks, the parties have 
been working diligently to rectify these problems, and I look 
forward to hearing about that progress today.
    I am now pleased to recognize the distinguished ranking 
member of this Subcommittee on the District of Columbia, 
Congresswoman Eleanor Holmes Norton.
    Ms. Norton. Thank you very much, Mrs. Morella.
    I appreciate that our Chair, Connie Morella, has scheduled 
this hearing to examine the findings of the recent GAO report 
on the District of Columbia Convention Center now under 
construction, and to hear responses from those most familiar 
with the project.
    It is difficult to overestimate the importance of the 
success of the new convention center to the District. The 
convention center is a rare example in this country of a 
convention center to be largely paid for by the private sector, 
our hospitality industry. At the depth of the fiscal crisis, 
the restaurant and hotel industry, on its own, stepped forward 
and volunteered to tax itself to build a larger convention 
center. However, congressional approval for the project was 
necessary to allow preconstruction activities and bonding. I 
was not able to get agreement in the 103d Congress on the 
necessary bill, because the city was in such deep fiscal 
crisis. In the 104th Congress, however, I sponsored H.R. 2108 
to allow preconstruction to proceed. In the 105th Congress, I 
sponsored H.R. 4237 to allow bonding for construction to move 
forward.
    This project is a vital key to the development of the new 
downtown. However, the convention center also is important to 
the D.C. economy itself. Although the city is perhaps the 
preeminent tourist destination in the country, it has been 
unable to attract the largest conventions because of lack of 
capacity. As a result, the losses to the city have been vast, 
surely totaling billions of dollars over the years.
    The convention center is a home rule matter for the 
District of Columbia. Congressional involvement stems from the 
approvals that were required here. Congressional concern arises 
because of the importance of convention center receipts to the 
city's economy. The expectation has been that a convention 
center would for the first time draw the largest conventions 
such as the ABA and the AMA, and that the increased revenue 
would enable the hotel and restaurant industry to pay off the 
bonds because of their increased receipts. An additional 
benefit, of course, would be increased tax receipts to the D.C. 
government. This is a marvelous example of a win-win for the 
city and the industry, and a departure from taxpayer-built 
arenas and convention centers that are the rule nationwide.
    No one could have anticipated September 11th, the anthrax 
scares, and the barricades that have created a foreboding 
atmosphere to the city. My concern therefore goes not only to 
the important issues raised in the GAO report: the estimated 
guaranteed maximum price, the estimated full cost of the 
project, and the extent to which these costs have been in line 
with the original 1998 estimates; the extent to which the 
contingency account will cover increased costs; whether the 
estimated financing sources will be sufficient to cover the 
total costs of the project; and whether the project will be 
completed on time.
    To these root issues have been added branches that may 
significantly affect the viability of the center once it is up. 
For example, I am particularly concerned about whether the 
hospitality industry, which has assumed the primary 
responsibility for construction costs, will be able to meet 
these costs in light of the slowdown in much of the industry 
since September 11th. We need to understand whether continuing 
shortfalls in receipts to the hospitality industry will result 
in shortfalls in the ability of the Convention Center Authority 
to meet its bond obligations, and what happens in that event. 
All of this, of course, in turn will affect city revenues which 
already are in trouble in the wake of September 11th, the 
shutdown and slow startup of National Airport, anthrax scares, 
the recession, and other effects on tourism. In addition, we 
need to determine if advanced convention and organization 
reservations for the new center have been affected by September 
11th, and whether plans for the new center are sufficient to 
meet increased security concerns.
    The convention center is not a gamble. Conventions have 
long been waiting in line for a new convention center here with 
the capacity to accommodate them. The uniqueness of the 
Nation's Capital makes virtually inevitable that this same 
market is there. Our task today is to make sure that we 
understand all of the contingencies so that we can both urge 
and help see that the city is able to meet them.
    I welcome today's witnesses, and am pleased to receive 
their testimony.
    [The prepared statement of Hon. Eleanor Holmes Norton 
follows:]

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    Mrs. Morella. Thank you, Ms. Norton.
    This is the first subcommittee hearing of the second 
session of the 107th Congress. As you know, the catalyst was 
the GAO report and, of course, the importance of the convention 
center.
    I want to welcome the people who are going to be on this 
panel and who will be testifying. Thank you for being with us. 
It is the policy of the subcommittee and the full committee to 
swear in those people who will be testifying, so if you would 
stand and raise your right hands.
    [Witnesses sworn.]
    Mrs. Morella. Everybody affirmatively responded and the 
record will so show it. And again, confine your statements to 
about 5 minutes in duration, we will then have a chance to ask 
questions and kind of expedite this hearing.
    Your full testimony, of course, will be in the record in 
its entirety.
    So we will start off, then, with Ms. Franzel, the acting 
Director of Financial Management Assurance Team of the GAO, I 
mentioned is the catalyst for this hearing.
    Harold Brazil is the chairman of the Committee on Economic 
Development of the Council of the District of Columbia. And I 
saw you on television last night, eating away and talking about 
some of the other incentives we can utilize in the District of 
Columbia.
    Eric Price hasn't joined us yet, but I will swear him in as 
soon as he gets here.
    Lewis H. Dawley III, who is the general manager, CEO, 
Washington Convention Center Authority. You are important to 
this hearing, obviously.
    And Dr. Natwar Gandhi, the chief financial officer of the 
District of Columbia who is no stranger to this subcommittee. 
So we will now proceed then.
    Ms. Franzel, if you would lead us off.

 STATEMENTS OF JEANETTE M. FRANZEL, ACTING DIRECTOR, FINANCIAL 
   MANAGEMENT ASSURANCE TEAM, GAO; HAROLD BRAZIL, CHAIRMAN, 
 COMMITTEE ON ECONOMIC DEVELOPMENT, COUNCIL OF THE DISTRICT OF 
   COLUMBIA; ERIC PRICE, DEPUTY MAYOR, PLANNING AND ECONOMIC 
DEVELOPMENT, DISTRICT OF COLUMBIA GOVERNMENT; LEWIS H. DAWLEY, 
    III, GENERAL MANAGER/CEO, WASHINGTON CONVENTION CENTER 
  AUTHORITY; AND DR. NATWAR GANDHI, CHIEF FINANCIAL OFFICER, 
                      DISTRICT OF COLUMBIA

    Ms. Franzel. Thank you. Good morning, Madam Chairwoman and 
Ranking Member Norton. I am pleased to be here today to discuss 
our recent report on the status of the District's new 
convention center. My remarks today will also include updated 
information on progress made by the Washington Convention 
Center Authority since our report was issued on November 30, 
2001.
    As agreed with the subcommittee, my comments today will 
cover the following three areas: the status of the guaranteed 
maximum price negotiations between WCCA and its contract 
manager; the estimated timeframes for completion of 
construction; and estimated cost projections and financing.
    First, WCCA and its contract manager have made significant 
progress in their negotiations to arrive at a guaranteed 
maximum price [GMP], for the construction portion of the 
project. WCCA and the contract manager have agreed on a GMP 
amount of $591 million. This agreement includes resolution of 
the $135 million in pending change orders that we reported were 
outstanding in November.
    The next step is a review of the proposed GMP agreement by 
WCCA's board of directors, followed by formal ratification of 
the agreement by both parties. The agreed-upon GMP amount 
represents a $71 million increase over the estimated GMP that 
we cited in our November report. WCCA attributes the majority 
of the increase to the inclusion of costs that were previously 
considered outside of the GMP agreement, such as work related 
to soil contamination, metro station, as well as other costs. 
So, in other words, costs have been transferred into the GMP 
from line items that were previously considered outside of the 
GMP.
    Second, WCCA and its contract manager have reached 
agreement on completion dates for the new convention center. In 
our November report, we noted that WCCA and the contract 
manager had significant differences in their estimated 
completion dates. WCCA and the contract manager have agreed on 
March 31, 2003, as the substantial completion date for 
convention-ready areas, which would include the areas of the 
facility that can be used for actual convention activities. The 
substantially complete status will include having certificates 
of occupancy for those convention areas.
    In addition, WCCA and the contract manager have agreed on 
October 31, 2003, as the final completion date for all cross-
examination activities.
    Finally, in our November 30th report, we noted that the 
estimated total cost of the new convention center was at $778 
million, with an estimated $815 million in financing available 
to cover those costs.
    Since our November report, the total estimated cost for the 
new convention center has increased by $21 million, to $799 
million. While estimated total costs have increased, the 
financing available has remained the same at $815 million.
    Based on these figures, an estimated $16 million surplus 
currently remains available to the project. WCCA issued revenue 
bonds, backed by dedicated taxes, to finance the construction 
costs of the project. Dedicated taxes were also used as part of 
the financing for the project. Currently, all of the dedicated 
taxes used to finance the construction of the convention center 
have been received. All future dedicated taxes are pledged as 
security for WCCA's debt service.
    In summary, significant progress has been made in the 
negotiations between WCCA and its contract manager. WCCA and 
the contract manager have agreed on a GMP amount of $591 
million; a date of March 31, 2003, as the substantial 
completion date for convention areas; and October 31, 2003, as 
the final completion date for construction.
    Although the total estimated costs of the project have 
increased, an estimated $16 million surplus remains available 
for the project.
    Madam Chairwoman, that concludes my statement. I would be 
happy to answer any questions that you might have.
    Mrs. Morella. Thank you very much, Ms. Franzel. Sounds like 
a lot of progress has been made since the report was issued.
    [The prepared statement of Ms. Franzel follows:]

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    Mrs. Morella. Mr. Brazil, very happy to have you with us, 
sir.
    Mr. Brazil. Thank you very much. I am pleased to be before 
the Congress, and particularly before you, Congresswoman 
Morella, and before my very own, if you will, and the 
District's representative, Congresswoman Norton.
    I learned a very important lesson last night: that there is 
a lot of meat to Washington, and certainly it is something you 
can sink your teeth into.
    I come to you today really from that perspective; that is, 
from the economic development perspective. And it is our job in 
the Council, and the Mayor and the others, to make sure that 
there is productivity, there is vibrance. And this project, the 
Washington Convention Center, is a part of that, and certainly 
we are going to make sure, along with you, that our goal of 
bringing in the project on time and under budget is achieved. 
It is very achievable and will be.
    We are also concerned with the benefits that will flow to 
the community to ensure that the community grant program is--
becomes a realty, and that local small businesses and citizens 
participate in this in terms of jobs and prosperity.
    The Council really shares with the Congress, particularly 
this subcommittee in its oversight role, and we take it very 
seriously. I have had just numerous contacts and interaction 
with Mr. Dawley, his staff, and others on this project, so that 
we don't have to wait until 3 months from now, 4 months from 
now to get a report; we sort of understand it as we go along.
    We have at least two public hearings, major hearings on the 
project every year, and have scheduled the second one for 
February or March of this year so that we can get into some of 
the nitty-gritty of the issues and air them publicly to 
discharge our oversight function. In our oversight capacity, we 
have retained a construction monitor, if you will, so that we 
can get into the very technical aspects of this project, and 
understand them and make sure that everything is according to 
Hoyle.
    We have the Millennium Group that has now replaced the 
Temple Group. Also there is a Convention Center Authority 
Advisory Committee that is made up of citizens and Council 
appointees. They meet monthly, again to ensure that everything 
is going along appropriately.
    So I guess I am really here to assure you from the 
Council's perspective that our eyes are open and we are doing 
everything that we can to ensure that this project does come in 
on time and within budget, and I am convinced that it will.
    And I thank you for the opportunity to come before you this 
morning.
    Mrs. Morella. Thank you, Mr. Brazil.
    You can answer a question at greater length, since you 
didn't even get to your 5 minutes. I appreciate the work that 
the committee has been doing, the advisory committee, in your 
other meetings.
    [The prepared statement of Mr. Brazil follows:]

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    Mrs. Morella. Now we look forward to hearing from Mr. 
Dawley. Thank you for being with us.
    Mr. Dawley. Good morning, Chairwoman Morella, Congresswoman 
Norton, and members of the subcommittee. Good morning. Thank 
you for the invitation to update the subcommittee on the status 
of the new convention center. I would like to thank the 
subcommittee for its efforts to assist the District of Columbia 
through the difficult aftermath of the tragic events of 
September 11th.
    For the record, I am Lewis Dawley, general manager and CEO 
of the Convention Center Authority. As you know, the new 
convention center is the fourth facility in which I have 
participated in either expansion or new construction. But the 
Authority is doing what no other organization in our industry 
has ever done: We are managing the full operation of an 
extremely busy convention center while also overseeing the 
construction of the new facility. The past year and a half has 
demonstrated that the Authority has assembled a quality team 
with the necessary experience and expertise to handle both 
operations.
    The new convention center project, in addition to being one 
of the largest in the country, is also the most complex 
development of its kind, and we have tightly managed what has 
been a massive undertaking. It has been difficult, but we are 
getting the job done.
    The Authority has accepted this difficult task because the 
existing and new convention centers are vital to maintaining 
and invigorating the District's tourism industry. More 
importantly, the new facility is a prime catalyst for the 
economic renewal of Washington, DC and the entire metropolitan 
area. But now more than ever, the importance of our task is 
clear. I can say on behalf of our Board of Directors' 
management staff, we are resolute in our determination to be 
successful.
    In many respects, all Americans can claim the new 
Washington Convention Center, located in the very heart of our 
capital, as their own. We anticipate and expect that this 
magnificent facility will quickly come to be known as the 
Nation's meeting place.
    Today the subcommittee has heard about the most notable 
aspects of the project's schedule and budget from GAO. You have 
also heard from Council Member Brazil about how the convention 
center project is monitored locally and the impact the project 
will have on neighborhood revitalization and economic 
development.
    What I will do now is provide more detail on where the 
project is currently, review how we got there, and advise you 
how we plan to complete construction on time and within our 
funding estimates.
    As you may recall when the Authority appeared before the 
subcommittee in 1998 to seek final approval for the project, 
several goals were outlined, including opening the facility in 
March 2003; building within the means of a strong financial 
plan; increasing contracting opportunities for local 
businesses; and providing employment for District residents. 
Despite the predictable and the customary challenges for a 
project of this size and complexity, these goals and objectives 
remain unchanged and they will be achieved. I would like to 
tell you where we are today.
    The design is 99 percent complete. Over 98 percent of all 
trades have been contracted, and construction is approximately 
55 percent complete. In getting to this point, the following 
milestones, among others, were achieved. We have excavated over 
2 million tons of soil. We completed installation of a totally 
new utility infrastructure around the site that will also 
benefit the community that surrounds the convention center: The 
Shaw, Blagden Alley, and Mount Vernon Square Communities.
    We have completed erection of a 44,000-ton super steel 
structure. The mechanical, electrical, and plumbing systems are 
being installed as we speak. And in the next new months, the 
interior enclosure of the building will be completed. The 
interior work has recently begun and will accelerate toward 
completion in a little more than a year from now.
    We have selected an art consultant for implementation of 
our $4 million art program to work in conjunction with the D.C. 
Commission on Arts and Humanities. As part of that, we 
established an executive committee with representatives from 
the Smithsonian and Corcoran Museums as well as the Federal 
Commission for Fine Arts. We have also put together an advisory 
committee that consists of nearly 30 local artists. The project 
has achieved a 50 percent contracting percentage with local, 
small, and disadvantaged businesses, surpassing our goal of 35 
percent. And nearly 600 D.C. residents have been hired to work 
on the project, including 67 who have entered a program that we 
call the Step-Up Apprenticeship Program that I am extremely 
proud of.
    I would like to thank Congresswoman Norton for assisting us 
in helping that program become a reality. Because of the 
Convention Center Authority's Shaw Comprehensive Job Training 
Academy, nearly 1,000 D.C. residents have received job 
readiness counseling and training in a variety of career 
skills, and nearly 500 have earned employment through the 
program.
    In addition to these accomplishments, we have met and 
exceeded all of the construction impact mitigation measures 
requested as a condition of the project's approval. I am proud 
to report that because of our Business Impact Grant Program, 
grants totaling nearly $250,000 have been awarded to sustain 
impacted businesses around the construction, and not one has 
closed.
    As you can see, the project has come a long way from where 
we started. When the project was approved in 1998, we 
established it as a ``fast track'' project.
    I guess I am running out of time here.
    Mrs. Morella. Go ahead.
    Mr. Dawley. What that means is, in a fast track project on 
a convention center, it must be ready to host shows to begin in 
April 2003 when our first conventions are scheduled. Therefore, 
the schedule was compressed so certain phases of construction 
could proceed on a design as it was being finished.
    The realty of simultaneous designing and constructing a 
facility of this size during what has been a very competitive 
construction environment, as we have read in the news media, 
has been very challenging. We have had to deal with the removal 
of over a half million tons of hazardous soil, partial collapse 
of a small portion of the roof system, and some difficulties in 
contracting with trades.
    These challenges have been met by our development team. The 
culmination of this--let me back up here a little bit. We have 
taken some effort to make sure that we were able to meet this 
design schedule that has come to fruition with this reset GMP 
that we have established with our construction manager.
    As we mentioned, that agreement with Clark resolves the 
vast majority of outstanding issues that were related to design 
cost and schedule that was in the GAO report. In particular, 
the agreement eliminates $109 million of the $135 million of 
accumulated claims. The $26 million balance of these claims 
will be covered by reserves and allowances within the GMP.
    The amendment also calls for the facility to be ready to 
host conventions in March 2003. The final GMP number will be 
$799.5 million, which is just 12 percent above the originally 
approved budget. In addition to providing a sense of certainty 
to the projected substantial completion date, keeps costs, 
which is significantly important for us, within our estimated 
available funds, as you have heard this morning.
    The total source of our funds--and I am kind of jumping 
ahead so I won't take as much time--the estimated--the total 
source of our funds for completion of the project is 
approximately $815 million. The Authority has secured 97 
percent, $790 million. And just this week our board of 
directors approved a food service contract that will provide 
additional outsource funds that we reported to you in 1998, and 
in fact the amount of that is $10 million.
    Also there is--let me say this about the industry and where 
we are. And I would like to take a second and expressly thank 
Congresswoman Norton, because what you said in the beginning, 
about the importance of this after September 11th, is very 
accurate.
    Congresswoman Norton, through her efforts, was able to help 
us maintain the Congressional Black Caucus meeting, which was 
important for us, because as you might expect, there were a 
number of conventions that were planning to come to the city 
recently, after September 11th, that had concerns about that. 
That effort allowed us to not lose one convention during this 
period after September 11th. So I would like to thank her for 
that.
    Finally, I would like to thank the Mayor, the chief 
financial officer, Dr. Gandhi, who sits on our board, and 
Councilman Brazil for all of the support that they have given 
to this project.
    I will be happy to answer any specific questions you might 
have.
    Mrs. Morella. Thank you very much, Mr. Dawley. And I know 
there was a section of your testimony that you submitted, you 
didn't have a chance to mention. But it will be in the record 
in its entirety.
    [The prepared statement of Mr. Dawley follows:]

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    Mrs. Morella. Now I am now pleased to recognize Dr. Gandhi, 
our CFO.
    Mr. Gandhi. Thank you, Madam Chair, Congresswoman Norton, 
and members of the subcommittee. For the record, I am Natwar 
Gandhi, chief financial officer for the District of Columbia.
    I am here today to testify on the status of the 
construction of the new Washington Convention Center. The 
recent GAO report on the subject raises a number of concerns, 
especially with regard to the guaranteed maximum price and the 
timeliness of the completion. Overall, I do believe this report 
is a very good heads-up about this important project, and 
deserves serious attention.
    While disagreement on these kinds of issues may be common 
in the construction industry, particularly on large projects, 
we all have an interest in bringing this project to a 
successful and timely completion.
    There is one major connection between my office and this 
project, and that is the likely sufficiency of the sales taxes 
dedicated to cover the debt service. I believe that the 
dedicated stream of taxes will be sufficient to cover the debt 
service and that no additional revenue will be required. The 
revised fiscal year 2002 budget for the District estimates 
dedicated taxes for the new convention center at $60.53 
million. However, we now believe that because of the recession 
and aftermath of the tragic events of September 11th, that 
amount will likely reduce to about $60 million, a reduction of 
about $5 million. We will have a more precise estimate of this 
number by March of this year.
    This reduction in revenues should not affect the 
construction of the new convention center. The Convention 
Center Authority has completed a study on this issue, which 
concluded that even if the dedicated taxes were to decline, 
say, by $26 million, to a total of about $39 million, they 
could continue to operate the existing convention center and 
complete the new convention center as planned, with minimal 
impact to their reserve funds.
    I believe my oversight authority over the convention center 
is quite adequate. I serve on its board, and in that capacity 
vote on all matters that come before the board for approval.
    I also have to approve the convention center's annual 
operating budget. On matters relating to the issuing of bonds 
and adopting budgets and financial plans, the chief financial 
officer has a de facto veto authority. Additionally, the chief 
financial officer of the convention center reports to the 
general manager of the convention center and to me.
    Whether or not the latter relationship will continue in the 
future depends on the authorities given to the District's chief 
financial officer by the Congress.
    Madam Chairwoman, that concludes my testimony. I will be 
pleased to answer any question you may have. Thank you.
    Mrs. Morella. Thank you, Dr. Gandhi.
    [The prepared statement of Mr. Gandhi follows:]

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    Mrs. Morella. I thank the entire panel for their opening 
statements.
    I know that Mr. Price is on his way. He has already 
submitted a status of the construction of the convention center 
to us. And so when he arrives, we will allow him to make any 
comments that he would like.
    I think I will start off, then, with GAO. The projected 
cost of the project, as you have mentioned, is now $799 
million. I just wondered if you could explain to us, what are 
the reasons for the increased cost of the project, and then if 
you would go into what adequate controls are in place to ensure 
that the project will not exceed that $799 million estimate or 
statement?
    Ms. Franzel. The cost increases, the increase up to $799 
million, is due to several factors. A couple of the largest 
factors are the hazardous material/soil contamination issues. 
That accounted for about $12 million of the increase.
    Increased design fees were another very large line item 
that increased, and that increased by approximately $17 
million. And then numerous other line items had some smaller 
increases; line items such as program management, legal, 
consulting, inspections, public works, and equipment. So all of 
those had some smaller increases. And together these increases 
then account for the new costs.
    Regarding controls in place, the concept of the GMP is to 
really put a cap on the total price and also to allocate 
responsibilities for costs between the contract manager and 
WCCA so that future increases in costs would then be the 
responsibility of the party that has been allocated those 
costs. So that, once ratified, should also help put in place a 
control over the costs.
    I believe that there intended to be some cost savings 
incentives and provisions in the final GMP amendment--I am not 
aware of all of the details--but that would also provide some 
controls over costs. Again, this is not finalized or ratified, 
but getting the GMP finalized will help tremendously. I believe 
there is also a contingency factor built into the current $799 
million of around $112 million.
    And as we heard, the current GMP does have some reserves 
built in for those pending change orders that hadn't been 
resolved, so there is some cushion, and the GMP should provide 
some controls. But ongoing monitoring and oversight will 
continue to be very important.
    Mrs. Morella. You heard Mr. Brazil's comments about the 
oversight and the advisory meetings. Do you think that is going 
to enhance this control mechanism?
    Ms. Franzel. Very definitely. We have been coordinating 
with the results of Mr. Brazil's studies.
    Mrs. Morella. I would like to direct that very same 
question to Mr. Dawley, obviously.
    Mr. Dawley. Well, Madam Chair, I can answer that. But I 
think that it is important that I have just a moment here to 
just explain, you know, what this project is about and how we 
got into this and why this is important. It all ties into the 
things that are related to the costs.
    You know, there are--from our perspective, there are four 
elements of this project that make it a very special and 
dynamic project. One is quality. You know, it is important that 
we never sacrifice the quality. As you know, the convention 
center meetings and convention industry is a very competitive 
industry. And it was important to us that when this project is 
finished, that it would be what I feel will be one of the 
finest convention centers in the world and a truly world-class 
convention center. So, you know, we have endeavored to not 
sacrifice that quality in how we have made decisions to move 
forward.
    The second element of that is that we have always been 
conscious of our costs relative to our sources of funds, so 
that we managed those costs with the interest in making sure 
that we had available funds.
    The third is the schedule. You know, you have mentioned the 
schedule this morning and why the schedule is important. We 
made a conscious decision in 1997 to start booking conventions 
in the convention center. There are two avenues that you can go 
down when you make a decision to do that. You can wait, as some 
convention centers in some cities have done, and a couple of 
years out you get a sense of where you are in terms of the 
schedule, and you start to book business. But then there is a 
price you pay: Your convention center sits there for maybe 2 or 
3 years and doesn't give the full benefit back to the community 
that you expected.
    So that was a decision that we made to start booking 
conventions; in fact, in April 2003, two of our first 
conventions that would not be coming to Washington if it wasn't 
for the new convention center. So that is important, because 
the schedule has always been something that we have focused on.
    And the fourth is that there were responsibilities that 
were given to this organization in terms of benefit to the 
community. And as I mentioned and Councilman Brazil mentioned, 
that was related to business opportunities for businesses in 
the District and job opportunities. So all of that is important 
to this, because it does have some impact on how we have made 
decisions in terms of how we have managed the costs of this 
project.
    But when you take into consideration where we are today, 
you can see there is light at the end of the tunnel. The three 
largest and most complicated parts of the construction are 
behind us, which was obviously digging the hole, which was the 
excavation. On any project when you start to do that, you never 
know what is down there. You can do all of the testing that you 
want. We found that there was some--apparently, years ago, 
there had been some gas stations and things like that on that 
site, and we had some soil remediation efforts that we had to 
make. So that is behind us.
    The second largest part of this project has been the site--
the utility relocation and the concrete work. On a project of 
this size, that is massive. That is now behind us.
    And then the third, what I consider to be--if you have 
driven there, if you have gone past there, you have seen that 
is an enormous steel structure there.
    Now that the steel is behind us, and as part of resetting 
the GMP and these costs and closing out that part of the 
construction, that is important because now we are basically on 
what I consider to be the finish line of this. We are currently 
closing out and trying to wrap up the mechanical, electrical, 
and plumbing; then we start to get into just interior things, 
which is carpet and wallpaper.
    Mrs. Morella. I would like to just interrupt you. Tell me 
just briefly, are you offering financial incentives for 
completion on time, and then are you offering penalties for 
noncompletion?
    Mr. Dawley. There is a financial incentive. If you want 
specifics about that, I should probably have Alan Lew, our 
managing director of development come up, and he can tell you 
specifically what those incentives are. But we do have some 
incentives in the GMP to finish this in March 2003. There is a 
liquidated damages that goes into effect, and that goes into 
effect, I believe, on June 1, 2003. So, yes, there is.
    Mrs. Morella. We may pursue that later. I see Mr. Price is 
here. I know the difficulty of scheduling and transportation. 
So, if you would, I am going to let you give an opening 
statement. But before you do, would you stand and raise your 
right hand. I will just swear you in briefly.
    [Witness sworn.]
    Mrs. Morella. Thank you. So if you have caught your breath, 
you may proceed.
    Mr. Price. I do apologize.
    Mrs. Morella. We do have a copy of your testimony that you 
submitted.
    Mr. Price. Good morning, Chairwoman Morella, Congresswoman 
Norton, and members of the subcommittee. Thank you for the 
invitation to discuss the state of tourism in the District of 
Columbia as well as provide the administration's perspective on 
the development of the new Washington Convention Center.
    I would like to take this time, this opportunity, to thank 
the subcommittee, particularly Chairwoman Morella and 
Congresswoman Norton and Congressman Davis, for your assistance 
in dealing with the aftermath of the terrorist attacks in New 
York City and the Pentagon. Especially I would like to thank 
you for reopening the Capitol to visitors, as well as your work 
with the Mayor and regional leaders to resume air service at 
Reagan National Airport. Both of these actions have sent a 
strong message out to the world that Washington, DC, is safe 
and open for business.
    My name is Eric Price, and I am the deputy mayor for 
planning and economic development for the District of Columbia, 
and it is my honor to represent Mayor Williams here today.
    I will begin by speaking about the District's recovery from 
the attacks and then follow with remarks about the new 
Washington Convention Center.
    Prior to September 11th, the District was weathering well 
the financial downturn that had impacted the Nation. The 
District was outperforming the national economy on a range of 
economic indicators.
    Tourism was up. The city's hotel occupancy rate surpassed 
New York City in August. At less than 5 percent vacancy rate, 
the District's office market was identified by the real estate 
industry as one of the top markets in the United States. 
Unemployment was down, and the city continued to create new 
jobs, 4,900 more jobs than the same time last year.
    Investment city-wide was up, pumping $10 billion into our 
economy from ward 1 to ward 8; Freddie Mac reported that the 
District's 29 percent rise in home values was the highest in 
the Nation for the third quarter of 2001, and the median price 
of a single-family home was at $217,000.
    Four months later, we are relieved to report that our dire 
economic forecasts have not materialized. Although the 
District, its business and residents have suffered 
economically--although the District and its businesses have 
suffered economically somewhat, greater Washington's 
hospitality industry lost an estimated $1.25 billion in 
revenues in 2001 as a result of the attacks. Student tours of 
the Nation's Capital are almost nonexistent, including field 
trips from our neighboring jurisdictions.
    However, since late fall, the hospitality industry is 
showing signs of rebounding. Hotel occupancy returned to a high 
of 74 percent in December from a post-September 11th low of 26 
percent. The convention center lost no bookings as a result of 
the September 11th or subsequent anthrax incidents, and 
convention attendance is climbing back to normal. Restaurants 
are also experiencing a steady return to their previous levels 
of business, and seasonally adjusted unemployment dropped from 
6.6 percent in September to 6.3 percent in October.
    The city, the Convention Center Authority, the Washington 
Convention and Tourism Corp. and the business, civic, arts and 
cultural communities have collaborated and worked aggressively 
on a campaign to rebuild our tourism economy. There have been 
successful promotions. We've had two Restaurant Weeks; we're 
going into our second. We just started Holiday Homecoming, D.C. 
Sales Tax Holiday, Metro Free Weekend to bring regional 
visitors and revenue into the city. The cast of NBC's West Wing 
and Warner Brothers volunteered to produce four promotional 
advertisements of the city that will be seen by regional and 
national audiences beginning January 21st.
    Our other new partners in the recovery include the 
Smithsonian Institution, which participated in Holiday 
Homecoming and is providing February's Smithsonian magazine 
wrapper, which has a circulation of 2.6 million people, to 
promote Washington, DC, to its readers. Also companies such as 
New Balance shoes, who sponsored Washington Walks, will be 
featured in Conde Nast Traveler magazine, which has a 
circulation of 800,000 people.
    There has been a strong, solid effort to promote a 
resurgence of the city's hospitality industry that will ensure 
that hotel occupancy and the levels of revenues generated meet 
and surpass pre-September 11th levels. I am confident that this 
effort will continue and that it will result in a strong flow 
of dedicated revenue to support the new Washington Convention 
Center.
    The new convention center is projected to have a 
substantial positive impact on the District and the region. 
According to an economic impact study conducted by Coopers and 
Lybrand, when fully operational, the center is projected to 
have an annual total economy impact of $1.4 billion, $656 
million of this on the District and $776 million on the 
metropolitan region. Additionally, the center will produce over 
17,000 jobs, 7,800 for D.C. residents and 9,700 for the 
metropolitan region.
    In anticipation of the new convention center, 16 new hotels 
have been completed or will be completed by 2004, adding 7,500 
rooms that will be added to the city's inventory of 26,000 
rooms. The recent awarding of the neighboring Wax Museum site 
will add additional vibrancy to the neighborhood and retail 
opportunities for convention center attendees.
    By District statute, the Mayor or his designee and the 
chief financial officer are ex-officio members of the 
Washington Convention Center Authority Board which oversees the 
operation of the current convention center and development of 
the new convention center. I have served as the Mayor's 
designee to the Board since my appointment as Deputy Mayor over 
2 years ago. I attend monthly meetings of the Board and serve 
on the Board's Operation Committee.
    The Mayor and the Council of the District of Columbia 
appoint the remaining members of the Convention Center 
Authority Board, and since taking office, Mayor Williams has 
only made two appointments to the Board. Recognizing the 
importance of the Board's role and oversight of the 
construction of the project, the D.C. Council recently approved 
legislation over the current--holding over the current board 
until the completion of the new convention center.
    Greg Fazakerley, who is the chairman and CEO of CG 
Investments, serves as chair of the Development Committee, and 
Mr. Fazakerley has over 20 years of development experience. He 
also has worked closely with the Authority's construction 
manager and development team and provided the Board thorough 
updates on the construction and all issues that have arisen, 
including providing the Board oversight of the recently 
negotiated guaranteed maximum price, which resolved the 
majority of outstanding issues related to design, cost and 
schedules.
    The Authority's financial team and auditors have assured 
the Board and the Mayor that the approximately $100 million of 
available reserves is more than sufficient to meet the debt 
service requirements and that the Authority will not need any 
additional District or Federal funding or taxes. I am confident 
that under Lewis Dawley's strong leadership, the Authority will 
open in March 2003 on time and on budget.
    There are two other major projects related to the 
convention center that you should be aware of, the development 
of a convention center headquarters hotel and the redevelopment 
of the existing convention center site. Since last fall, my 
office, the chief financial officer's office and the Office of 
Planning have been in negotiations with the two development 
teams who are judged to be best qualified on their responses to 
our request for proposal to provide a 1,000-plus room 
convention center hotel. The terrorist attacks of September 
11th have definitely had a negative impact on the already 
challenged hospitality capital markets, and as a result, my 
staff and our advisors, Strategic Advisory Group, have taken 
some additional time to see if the financing proposals will 
hold up in the current marketplace.
    With the recent completion of the final stage's selection 
process, the CFO and I will likely make a selection in the next 
few weeks. When completed, we project that the headquarters 
hotel will generate an estimated $10 million in net new 
District tax revenues.
    In addition, last year my office and the Office of Planning 
issued a phase one plan, which proposed a set of uses and a 
general process for the redevelopment of our old convention 
center or the existing convention center site. Late last year, 
we selected a consultant, Hamilton Rabinowitz and Alschuler to 
advise us in the structuring of the redevelopment process and 
development of the developer solicitation.
    After examining the experience of other cities and other 
threshold issues, the Office of Planning and HR&A have begun 
the process of creating a development solicitation and engaging 
with groups like the Federal City Council and the Martin Luther 
King Library who have an interest in the site. Over the next 3 
months, we will finalize the process and offering documents, 
and we expect to formally engage the Council and other 
stakeholders later this spring.
    I want to thank you for this opportunity to speak on these 
two critical elements of the District of Columbia's economy, 
and I am available to answer your questions. Thank you.
    [The prepared statement of Mr. Price follows:]

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    Mrs. Morella. Thank you very much, Mr. Price. I'm now going 
to recognize the distinguished ranking member, Congresswoman 
Norton, for her questioning.
    Ms. Norton. Thank you. I thank you very much, Congresswoman 
Morella.
    Dr. Gandhi in his testimony indicated that of course many 
of the increases and unanticipated costs are what you see in 
large projects, and I'm sure that's true. I am having a very 
hard time; this is in part because the GAO report is focused so 
specifically on D.C. I can never judge anything except compared 
to what--the District of Columbia, for example, is always 
judged on what is happening--on its own terms.
    So that--for example, I remember when the Control Board was 
here and there was the big problem with the schools, and we 
were told that the District of Columbia schools were the worst 
in the country. That wasn't even true. That wasn't even true. 
And people were comparing the District of Columbia with States, 
and it just wasn't true that the District of Columbia schools 
were worse than New York City, you know, or Birmingham, AL.
    And so, you know, the academic in me wants to say, how can 
I judge this; and obviously I want to ask questions and insist 
upon holding the District to a high standard, but none of us up 
here are construction experts. Therefore, it is hard for me, I 
will say to Ms. Franzel, to judge what--when we are talking 
about the largest building in this city since the Ronald Reagan 
Building--and the Ronald Reagan Building is the largest 
building that the Federal Government has ever built, and 
there's no building of its size, anywhere near its size, in the 
entire region, and it's hard to find a building anywhere in the 
country as big as that. So at least that gives me one standard 
by which to judge.
    So here this is second, in this city, only to the Ronald 
Reagan Building. I'll tell you one thing. I'm on the committee 
that had jurisdiction over the Ronald Reagan Building, and we 
had to go through a version of hell to make sure that building 
not only went up because of its size, but it was used for the 
purposes that it was intended. It was quite an ordeal.
    So I cannot help but begin by asking Ms. Franzel whether 
the GMP increases, whether the delays we've seen, how they--
those issues that concern us. Estimated costs are compared to--
actual costs compared to estimated costs, how that compares to 
the standard in the industry, or else I just don't know 
anything to say, except do better, and that is not a very 
scientific way to go about judging a project.
    Ms. Franzel. Sure. The focus of our work was really to look 
at the estimated costs in relation to financing available, 
because although certain norms might be occurring out there in 
the construction industry for such projects like this, I think 
our real concern was whether the current estimated costs were 
still within the available financing for this particular 
project. So we did not attempt to compare, you know, the levels 
of increase on this project with levels of increase on other 
projects around the United States. Our chief concern was 
whether the current financing available would still be 
sufficient to cover the current estimated costs.
    Ms. Norton. All right. Well, let me--again, to judge that, 
though one has to know whether or not when costs increase this 
way, whether that--obviously there can be great surprises. 
Well, let me go at it this way.
    I look at the original amount for unforeseen costs. That 
was $30.5 million. That's where we started in September 1998. 
Then I look in May of this past year, and the fact is that 
they'd used up most of it by then; $28.3 million is what's been 
used. So that in July--in June, rather, right after most of 
it--it became clear that most of it was being used, the 
contingency was increased, and they increased it by $50.7 
million.
    So that--as I look at these amounts, the estimated 
financing sources now exceed the estimate, the Convention 
Center Authority's estimated costs by about $16 million as of 
July. So the question then becomes, seeing what has happened 
over that time line and seeing that the cost of the building 
started at $799.5 and is now $815.7, let me ask you, given that 
time line then for this project, do you believe that they will 
continue to have enough money in the contingency to cover 
remaining unforeseen costs, or will they have to seek further 
financing?
    Ms. Franzel. That is really the key matter here. Because 
these new figures have just come out, we have not specifically 
studied the feasibility of completing the project within those 
estimates. We did, however, want to present a status of the 
current estimates, and perhaps WCCA can explain further some of 
the reserves and contingencies that have been put in place with 
this current budget to help ensure that it can be met within 
the current estimates.
    There is a contingency, and I believe there are reserves 
built into the figures which we've not had a chance to analyze 
because we just received those numbers last week, but currently 
there are some reserves and contingencies built into that 
estimated cost of $799 million; and that would be, then, in 
addition to the $16 million that is still out there that's 
available for the project.
    Ms. Norton. Well, that's important, and perhaps Mr. Dawley 
could explain that, that particularly, in addition to the $16 
million that's available, according to Ms. Franzel, there are 
reserves that could perhaps be drawn upon to make sure that the 
project was completed.
    Mr. Dawley. We are replenishing what you referred to as the 
contingency. As part of resetting the GMP, we have 
approximately a $30 million contingency that is included within 
the GMP and about $10 million outside of the GMP, and I believe 
we consider that the owner's account. So we do have--we are 
replenishing the contingencies, and as I mentioned earlier, we 
feel that when you look at where we are in terms of the 
construction and what we're doing, there's a reason why we 
reset the GMP at this point.
    As I said in the beginning, we've bought over--you know, 98 
percent of the job is bought where we are on construction. So 
we feel confident that these levels of reserves and 
contingencies that we have are going to be sufficient to 
complete the project at this time.
    Mr. Gandhi. And if I may add a word, Ms. Norton, you know, 
in addition there are the debt services fund, revenue 
stabilization fund, operating and marketing fund. So at each of 
these levels, we have reached the minimum, and in many cases 
exceeded far beyond that.
    Ms. Norton. This is very reassuring. Have you looked at the 
risk factors that could keep you from completing--let me note 
that you're to complete in March, and you have your first----
    Mr. Dawley. We have our first convention in April.
    Ms. Norton. In April. There's no wiggle room there.
    Mr. Dawley. Right.
    Ms. Norton. I'm glad there's no wiggle room. Let's get on 
with it. Let's get it on once it's completed.
    But it does put a premium on completing the project. Does 
that mean that in April we'd have a large convention?
    Mr. Dawley. We actually--at the beginning of April, we have 
our first convention; and then we have two large conventions in 
April, and we're busy in the new convention center all the way 
up until December. In my testimony, I don't know if I mentioned 
that we have I believe 20-something conventions already 
scheduled in that first year, so----
    Ms. Norton. So this looks like a guarantee that the 
convention center will be finished on time?
    Mr. Dawley. Yes. And we're working very closely with our 
construction manager, Clark Construction, and we've come up 
with a plan for what we're calling ``convention ready,'' which 
is going to get us ready. And as you would expect, you know, 
the initial report where GAO was reporting what was in the 
initial report before we had an opportunity to resolve those 
issues with Clark, caused some concern among our clients; and 
we've met with those clients that are scheduled to come in in 
April, and we've reassured them that the convention center is 
going to be ready. So we're working closely with Clark. We have 
a plan for that.
    Just as an example, there's a huge amount of carpet that is 
going into this building, and what we've decided is to expedite 
that. We're actually ordering the carpet now. We're going to 
store it. So we have a plan for how we're going to be there in 
April 2003.
    Ms. Norton. Yeah. Well, I certainly--when you say 
``clients,'' you mean people who were considering coming?
    Mr. Dawley. Were already booked.
    Ms. Norton. I hope people don't misunderstand what GAO 
reports mean in Washington, and we certainly want to help to 
clarify that, that they're routinely ordered, because that's 
the only way Congress can get independent information. So if 
an--if some explanation is needed, I'd be pleased to help 
provide that. It's just part of our oversight; it doesn't 
indicate that we had difficulty with--or saw any difficulty 
with how the convention center was proceeding.
    I have more questions, but I'd defer to the Chair and come 
back later.
    Mrs. Morella. Thank you. Actually, GAO reports sometimes 
also inspire and motivate actions, too.
    Mr. Dawley. Well, our competitors out there around the 
country took advantage of that opportunity.
    Mrs. Morella. Well, but I also think----
    Mr. Dawley. It's the nature of the business. I understand.
    Mrs. Morella. I also feel very comforted that you have a 
lot more in order, in terms of reaching----
    Mr. Dawley. Absolutely.
    Mrs. Morella [continuing]. The final destination of total 
completion. But I have a little question about some of the 
terminology.
    You know, I've often felt that they say around Washington 
to tell the truth, the whole truth and nothing but the truth 
means three different things. Now, that's not the case here at 
all, but let me ask you to define ``readiness,'' 
``substantial'' and ``final completion'' just so that I have it 
clear in my own mind.
    Mr. Dawley. Right.
    Well, frankly I'm kind of new at this concept we've 
developed on convention readiness, but what we had discussions 
with Clark about, you know, this building is so big, it's being 
built in three phases. You know, there's the north phase, the 
middle phase, as we call it, and the south phase; and a 
decision was made to kind of build each one independently.
    So how we pull those phases together and prepare for our 
clients that are coming in--because obviously they want all of 
the things that a convention center expects, all of the food 
service and the technology and all of those things--so our plan 
and what we're focused on is ensuring that we have a 
certificate of occupancy which--you can't get a certificate of 
occupancy until March 2003. We have to have that to be able to 
operate the building. That means all life safety systems and 
those things will be in place.
    So that's kind of what we're--when we say ``convention 
ready,'' we mean having a certificate of occupancy and having 
the building ready.
    Substantial completion means that, you know, there are 
things that you're still maybe finishing, which is--this is, 
like--there may be sections in the back of the house. There may 
be some warehouse storage areas, things like that, that you 
decided to kind of delay while you focus on these convention-
ready areas, but they don't really impact our ability to 
operate and function as a convention center.
    ``Final completion'' is when everything is done, you know, 
you've walked the building, and you've done all of the punch 
lists, and you've looked at those things. Although sometimes 
you agree to extend punch lists out because in a building this 
size, those things could take months. But ``final completion'' 
is that you've closed out all of the contracts. Everybody is 
gone. The subcontractors are gone. They've all been paid, and 
you've actually finished the project.
    Mrs. Morella. So, therefore, it will be--readiness will be 
March 31st?
    Mr. Dawley. Right.
    Mrs. Morella. And the final completion will be October----
    Mr. Dawley. Right.
    Mrs. Morella. 31st? It will, however--from March 31st on, 
it will not impede----
    Mr. Dawley. No.
    Mrs. Morella [continuing]. The use of the new convention 
center?
    Mr. Dawley. Right.
    Mrs. Morella. And you say you already have some people or 
entities----
    Mr. Dawley. We have a lot.
    Mrs. Morella [continuing]. That have already signed up for 
April, and you're not going to have any problem with handling 
that?
    Mr. Dawley. I believe I sent you a copy of my schedule--of 
our schedule of the convention center in my testimony.
    Mrs. Morella. Yes. And then you also indicated in answer to 
a question that I posed that you do have some financial 
incentives----
    Mr. Dawley. Right.
    Mrs. Morella [continuing]. For the construction manager to 
meet those construction dates. And within that, financial 
incentives, would be penalties, too, the carrot and the stick, 
both of those; and you feel pretty sure and Dr. Gandhi and Mr. 
Price and Mr. Brazil are all cognizant of that and feel that 
these are pretty good safeguards. That's correct?
    Dr. Gandhi, do you agree with that?
    Mr. Gandhi. Yes, ma'am.
    Mrs. Morella. Let me jump to the current convention center. 
Did I hear you say, Mr. Price--maybe you want to elaborate on 
this. Do you have plans in mind? Are you just asking people to 
submit their various proposals----
    Mr. Price. Right.
    Mrs. Morella [continuing]. For using that?
    Mr. Price. What we've done so far for the first step we had 
to take was where would a convention center hotel go, and so we 
put out an RFP with the CFO's office to solicit proposals for a 
new convention center hotel, because we had to rule out the 
possibility--or rule it in one way or the other, would it go on 
the existing convention center site. And then, once determining 
that, we can move forward with what would be our plans for the 
existing convention center.
    So we did get your proposals for the new convention center 
hotel. They are not on the site itself, and we'll make that 
decision. In the meantime, we are now--we've hired consultants 
to really look at some design planning issues, and all we've 
done so far is, the Mayor put together a task force with 
several stakeholders last year, and we came out with basically 
what kind of uses would you want to see on that particular 
site, and things that came out of that were, like, housing, 
boutique hotel. People wanted it to be a people-puller kind of 
cultural entertainment, a great public space.
    Those were the kind of ideas that came out of that. So what 
we're doing now is taking all of that information, using 
consultants throughout the country to help us come up with a 
framework from which we can then in about 3 months issue an RFP 
for development of the site.
    Mrs. Morella. Thank you. I'm now going to defer back to Ms. 
Norton for any other questions.
    Ms. Norton. Thank you very much, Mrs. Morella.
    Mr. Gandhi, among the most reassuring parts of your 
testimony concerned the capacity of the dedicated tax, because 
you testified that well beyond the kind of drop in sales tax 
we're now seeing--and this, of course, is a drop after an 
unprecedented event of a monumental sort--there would be enough 
to cover. Does that mean that there's a cushion in the reserves 
and how to dedicate it--and how much money the dedicated tax 
brings in in the first place?
    Mr. Gandhi. Even in the first place, there is a lot of 
cushion, that even if the taxes were to decline, say by $26 
million, you would still have a lot of money left over to take 
care of the debt services. As Eric Price pointed out earlier, 
things do not look now as bad as they looked immediately after 
September 11th.
    So we are quite encouraged about the movement of the 
economy; and I think, Ms. Norton, if I--just to belabor for a 
moment, I think the District's fundamentals are quite strong. 
As you have stated so many times, for the first time in a long 
time, our population has stabilized. Now, that is a sea change 
in the case of American cities, and when that raises our tax 
base, we will have people here living with us and people with a 
lot of income. So I'm quite confident that the dedicated taxes 
are more than enough to take care of this.
    Ms. Norton. So we don't subsidize this convention center 
now at all, and we've never subsidized a convention center, and 
we won't subsidize a convention center?
    Mr. Gandhi. Well, we do have dedicated taxes to take care 
of the convention centers for construction.
    Ms. Norton. But we've never had to subsidize it out of 
general revenues?
    Mr. Gandhi. Well, if you----
    Ms. Norton. The dedicated tax is to build the convention 
center, of course. I understand. I'm asking the Convention 
Center Authority, which operates the convention center now----
    Mr. Dawley. I can answer that.
    Ms. Norton. Yes.
    Mr. Dawley. After the act of 1994, the subsidy to the 
convention center from the District at that point was 
eliminated, and our operating expenses and the construction 
debt service is paid for from the hotel tax, the dedicated 
hotel and restaurant tax.
    Ms. Norton. I have a question for Mr. Brazil and, I 
suppose, Mr. Price. This, of course, is to be the sixth largest 
center. By the way, could I ask Mr. Dawley, is it still going 
to be the sixth?
    Mr. Dawley. As of today, yes.
    Ms. Norton. I never have been able to figure out how D.C. 
built a convention center that couldn't let the ABA come in the 
door in the first place. So I have to ask. Why build--they've 
already built a convention center once. Leave aside that over 
time your center will be--will have others to get larger, but I 
thought you measure by whether or not your--did these 
conventions get larger and that's why D.C. couldn't accommodate 
them?
    Mr. Dawley. Well, there's--and I'll try to answer this as 
simply as I can. As you know, you hear about convention centers 
like McCormick Place in Chicago--and I think you'll recall we 
talked about this in 1998--or Las Vegas. Those tend to be trade 
show destinations that have, you know, industrial-type 
mechanical trade shows which occupy a lot of floor space. Our 
market is the association market, which is--requires meeting 
space. The exhibit space tends to just support the meeting. So 
it's like comparing apples to oranges.
    Ms. Norton. No. But I'm talking about the ABA, the AMA. I'm 
talking about the associations. I'm not talking about the----
    Mr. Dawley. We can accommodate----
    Ms. Norton. But we apparently can't accommodate them now. 
At least they don't come now, because----
    Mr. Dawley. In the existing center, you mean?
    Ms. Norton. Yeah.
    Mr. Dawley. Yeah. No, we can't.
    Ms. Norton. I was simply trying to find out how we built a 
convention center, since we're association-oriented in the 
first place, that couldn't accommodate the largest 
associations; and I'm just hoping that this time we got it 
right.
    Mr. Dawley. Well, that's why I said quality, and what I 
believe is going to be the finest convention center in the 
world has been one of our missions and our goals that we not 
cut corners.
    Ms. Norton. Mr. Brazil, you may recall that when the 
convention center bill was before the Congress and before the 
Council, there were some who tried to torpedo the bill on the 
basis that it was not going to be large enough. You know, all 
kinds of things were done, but an important point was raised, 
and that was that it didn't have any place to grow, and that 
was the--kind of the last--the last way in which they did--
those who didn't want a convention center did a ``gotcha,'' you 
know, it's not going to be able to grow.
    At that time, you may recall that a plan came forward for 
an extension underground if an extension was needed, and this 
plan called for the extension to be paid for by the building of 
what I now--what I believe now, but I must ask, would be this 
convention hotel; that is to say, it would not be paid for--we 
probably are running out of ways to pay for it.
    We've already got the industry paying for this. You know 
that D.C. can't pay for it, so it was to be paid for.
    Nobody has even mentioned this underground extension, and 
it makes me very nervous. I hear a lot about this hotel, but 
nobody mentions whether or not these plans for extending the 
convention center, as is inevitable, if it outgrows its present 
space, are still the plans for the city--for the center.
    Mr. Brazil. Well, I would like to address that, but I think 
Mr. Dawley and Mr. Price would probably give you more accurate 
information.
    Mr. Price. I would like to take an attempt at that, because 
it's tied to the convention center hotel. You're exactly 
correct, as well as what happens at the existing convention 
center site; so all of the work we're doing right now, that is 
an issue, and in terms of choosing who will get the--who will 
win the new convention center hotel, that's been part of those 
discussions. And I'd be glad to even off-line talk more about 
it, but it is part of the negotiations----
    Ms. Norton. But it was very specific. It wasn't just that 
you're going to have a hotel where the revenues will end up in 
the general revenue. It was, you know, D.C. gets used to the 
revenues from this hotel being a part of the general revenue, 
it will be very difficult to do anything but say that D.C. is 
paying for the extension. What I want to know is, in the 
process, all this fancy stuff that--sure, people are going to 
come and say they want to build a convention hotel, even in a 
city that is full of hotels. The location of this hotel would 
make it a prime location for a hotel.
    I want to know if the link between the revenues generated 
and extension for the convention center remains.
    Mr. Price. Right now, and what I was going to finish up 
with is that if the--a new space or additional exhibit space 
that the convention center hotel needs is not part of the new 
convention center, then Lew has--is ready to begin a process of 
siting where that would go, and one of the places would be----
    Ms. Norton. I'm sorry. Could you say that again?
    Mr. Price. Lew has started or will start--Lew Dawley, I'm 
sorry--looking at the siting issue of where that space would 
be, and one of those options is the existing convention center 
site. Paying for it, we haven't really gotten there yet. It 
could be tied to the new convention center hotel, part of the 
public-private partnership or a full public partnership that 
pays for it. It could be we come back to the convention center 
and look at the taxes that are being raised now for the new 
convention center, but we just don't have the answer to that, I 
think, at this time.
    Mr. Dawley. We actually have started the process of 
developing a feasibility study, which I recommend, and as you 
know, all convention centers kind of do that today when they're 
built on future expansion and what the options would be. And as 
Mr. Price said, you know, we haven't gotten far enough along 
yet to really look at the financing issues.
    Ms. Norton. Well, I have a feeling this project would have 
had a much harder time getting through the Council and the 
Congress if we had not been assured----
    Mr. Dawley. Right.
    Ms. Norton [continuing]. That the city had a way to expand 
it. And the reason was that the city's first convention center 
was obsolete as soon as it went up, and that's often not the 
fault of the jurisdiction.
    So my only concern here is that if no real discussions 
continue to go on in the city, what will happen is that revenue 
will be dedicated to the District of Columbia, which like any 
government, can always spend it on very worthy issues. And I 
urge that the planning include the probability that this center 
is going to have to be extended. And while you might use the 
revenues in the meantime for something, and, yes, our 
populations have been stabilized, is one of the great--Mr. 
Gandhi's point here--is one of the great and important gains in 
the District of Columbia, making it almost unique.
    But the fact is, we need 100,000 more people, as the 
Control Board has said, to even support what we've got. So it 
seems to me that this planning is going to be very important.
    Madam Chair, I have only one question. I just want to 
congratulate the convention center for the way in which it has 
not only agreed to the step-up program, but used it. The reason 
this was so important--and I had the entire industry and all of 
the unions, all of those involved, in before this project 
began--is because the Federal Government in 1980 stopped doing 
joint apprenticeship programs with management and with 
developers and contractors; and what that has done is to leave 
us with a generation of young men and women in the inner cities 
who have not been trained to work in sheet metals, to be 
electricians, to do much of the work. So cities are being built 
by people who live in suburbs.
    That is an abomination. It's the fault of the Federal 
Government, because the fact is, it was that agreement, 1980, 
the first thing the Reagan administration did was to abolish 
this program, and it really condemned particularly a generation 
of young black men who were the most ready pool, condemned them 
to--you know, to doing what they did. They went into the 
streets. There was no money to train them.
    So the step-up program is a way to try to get around that, 
and the convention center is one of the few examples in the 
city----
    Mr. Dawley. In the country.
    Ms. Norton [continuing]. Of it having worked successfully.
    Now, Mr. Brazil, the city itself--this is Mr. Brazil--it's 
really Mr. Price, but because the Council passed its own bill 
that said you couldn't come in here and build and use revenue 
bonds and the rest, and continued to recruit labor the way you 
always did; and there has been a lot of consternation that the 
city has not in fact met its promise, except at the convention 
center.
    So I've got to ask what the--whether the Step-Up--my--and 
just let me indicate that the clout to do so really comes only 
from enforcement and the notion that you're going to monitor it 
to make it happen. I have--the largest projects coming in the 
District are Federal projects that have come through my 
committees--DOT, the Southeast Federal Center, the AFT, the 
SEC. I have insisted that each and every one of those projects 
have a Step-Up program, and each and every one of them is going 
to have one; and the GSA cooperates with me, because I just 
keep on them.
    Now, if the city government does not keep on them, whatever 
the Council passes is not going to mean anything; and I have 
been very chagrined that there have been picket lines in the 
city. It should be an embarrassment to all of us. There have 
been picket lines in the city about how D.C., doing so much 
better, has not enforced its own laws.
    I guess I should ask Mr. Price where you are on enforcing 
these agreements in places like George Washington University, 
which come to you to get revenue bonds, make you a promise. 
Then there's the picket line. I know whatever happens after 
that--and I understand this is continuing around the city; and 
I'd like to know what you're doing to enforce the law that was 
passed. I said, I'm not going to continue to bring jobs into 
this city for the suburbs. They already get a free ride, 
subsidized by the District of Columbia with no commuter tax.
    So I should think you would be up in arms that all these 
jobs are being filled by people who don't live here. But unless 
somebody is willing to get on them to do what the convention 
center did, this is the way it always happens. So I've got to 
ask you about that, since it has bothered me no end to see all 
of these cranes--some of them are because of my own D.C.-only 
tax breaks for businesses, a big reason you see so many cranes.
    Well, it breaks my heart, unless some of these young men 
and women from the District of Columbia are at least being 
trained through apprenticeship programs as this money flows 
from the Federal Government.
    Mr. Price. Well, I don't disagree that it--not enough is 
being done to ensure that these jobs do go to District 
residents. And you're right. I think Lou has pointed out that 
the Step-Up program is one of the few in the country, and it's 
one of the few, because it is so difficult to do. And I agree 
with you, and he----
    Ms. Norton. Why were you successful, Mr. Dawley, in doing 
this, and the District of Columbia has had such difficulty? 
What's the difference? What does it take?
    Mr. Dawley. Well, I think one of the things that made this 
successful was that we had the building trades participate and 
commit----
    Ms. Norton. But they've got the building trades. They're 
building things subsidized by the District of Columbia, tax 
breaks from the District of Columbia. Same building trades----
    Mr. Dawley. And Clark Construction's were----
    Ms. Norton. You mean these were union trades and the others 
are not? I mean, is that the----
    Mr. Dawley. In some cases, maybe.
    Ms. Norton. The Federal Government does not require that 
unions build, and yet we're going to have a Step-Up program.
    What made your program so----
    Mr. Price. Do you want me to respond to that?
    Ms. Norton. Yeah. I don't understand, and I really would 
like to, because if I understand that, I know what we have to 
do to make sure it succeeds, and my own projects that are 
coming on-line; and it would help the District if you would 
carry that over so that the District can use that.
    The District wants this to work. Here it has this big 
project that's made it work. Why has it worked here, but didn't 
work at George Washington University, didn't work at these 
other places that----
    Mr. Price. One difference between George Washington--I'll 
just give you one and, again, I don't want to make any excuses 
because I agree with you that not enough is being done, but one 
difference is, in the convention center, the District is in a 
way the owner of the project, and that has a big thing to do 
with the enforcement of it and the follow-through. On the 
revenue bond programs, the District is----
    Ms. Norton. Well, let me ask Mr. Brazil, does the statute 
that the Council passed, does it make it easier for a city-
owned building? Because if it does, and it's not a city-owned 
building, then of course I think we need to have the law 
revised, because almost nothing that's being put up is city-
owned.
    Does your statute, so far as you know, draw any--make any 
differences between city-owned and city-subsidized projects?
    Mr. Brazil. I'm not sure that it does. I think Mr. Price 
was just alluding to the fact that if you own the building--I 
mean, just as a practical matter--you can exercise more 
control.
    In talking about the revenue bond program in general, we--
our committee, my committee, oversees that, and one of the 
things--I think we have a--the executive branch has a good 
office that they screen the applications, etc. But one of the 
things that I insist on is to understand not only have you 
certified that you're going to meet the various requirements, 
be that sometimes apprenticeship programs, but mostly hiring of 
D.C. residents and the small business program requirements, not 
only have you certified that you're going to do it, but how are 
you going to do it? Tell me your plan so that I can see you, 
from today just before you get this $30 million, or as much as 
$300 million between that time and the completion of the 
project, how are you going to get there?
    And I have to--I think it's a work in progress. You know, 
some of the bond recipients are just very forthright, and they 
are very interested in meeting these requirements. Others, 
it's, you know, I don't want to have to do this, and I think we 
should gather--both branches of the government in Washington 
need to work harder, ask harder questions, monitor more.
    One of the things I'm going to urge upon Mr. Price and the 
Mayor is to put a little bit extra muscle, some more people in 
their LSDBE program, so that they can really go through these 
projects and monitor them--not after they're all finished and 
gone, but as they're going, are you meeting these requirements?
    And I think that the apprenticeship programs have sort of 
their own unique set of problems, but you're exactly right. If 
we don't make it happen, if we don't antagonize and be pests or 
however we do it, it's not going to happen and----
    Ms. Norton. Well, let me make a recommendation then, given 
what you've just said, Mr. Brazil.
    The city tries to say a certain number of residents from 
the city, a certain number--and of course that's the important 
point. The Step-Up program, the reason that the apprenticeship 
program may be the key here as opposed to saying go out and 
hire some residents, is that people who live in cities have not 
had the training to work on these jobs. So in a sense you--the 
city is giving the developer or the construction manager an 
order that he cannot make.
    If he's supposed to go out and find himself some carpenters 
and some sheet metal folks who live in the District, I mean, 
good luck. I just said you had a generation in which nobody is 
being trained.
    So may I ask this. We've been able to get people to work on 
Federal projects by saying you must have--negotiate with them, 
the Step-Up program. One way to do it is, instead of using 
these numbers, which are almost impossible to be met, to 
require that there be a Step-Up program on every project, 
because all that means is that they're going to have to train 
people. And it concedes what it seems to me is fair to them, 
that if you tell me, I've got to be from D.C. and I've got to 
fill these positions, then you've got to help me find a way to 
fill them.
    It seems to me the Step-Up program is an offer they can't 
refuse because it tells them there is a way to get people to 
train to be electricians, to train in sheet metal work, to 
train to do wire work; and we insist that you do that, and 
we'll help you do that. So I would ask that you--that--I would 
ask that you consider that as an approach to alleviating some 
of the tensions that has arisen in the city when people see 
that construction is going on all over the place but they are 
sure the D.C. residents, in fact, have not been hired and 
therefore the promise has not been kept. There's a reason the 
promise has not been kept, and I think the Step-Up program 
helps you to keep that promise.
    Thank you very much, Madam Chair.
    Mrs. Morella. Thank you, Congresswoman Norton. Are there 
any provisions that would not allow for some of the 
apprenticeship programs, those Step-Up programs? That's been 
something I've been concerned about.
    Mr. Price. The current legislation that we have for first 
source--our first source agreements, that the 51 percent hire 
and 35 percent procurements have to go to LSDBEs, doesn't have 
a lot of teeth in it. Quite frankly, there's not a lot of 
remedy if they don't. Just to give you an example, George 
Washington, who Ms. Norton mentioned, they had a requirement 
for them to be registered in the apprenticeship program. GW had 
22 of their 23 registered; 1 wasn't. We looked at how do we go 
about enforcing it. The only enforcement mechanism that was 
there was to that one subcontractor who did not agree to this 
program. If any other group came in and wanted IRB and wanted 
to include them as a sub, we could deny the IRB that way, but 
we couldn't stop the project, for example, which is what people 
wanted. As Councilmember Brazil said, there is a work in 
progress to see how we can put teeth in that legislation 
legally and do that.
    Mrs. Morella. I think----
    Mr. Brazil. Part of the problem with that particular 
contractor is I don't think there's another contractor in the 
region that can pour and work with the concrete the way this 
one can. So they're kind of giving you some reverse muscle, but 
we're working on them.
    Mrs. Morella. I also--I appreciate the fact that you are 
working on it, because I do think it's an important opportunity 
with regard to utilizing our human capital in the District of 
Columbia.
    Let me ask you about the heating and cooling system, 
because my understanding is that--those systems are going to be 
done by Trigen and Pepco Energy Services, and I'm wondering 
about how is it proceeding? How much is it going to cost?
    Going further, will they be able to sell services outside 
of clients for the--of the convention center other than the 
convention center as its big client, and has WCCA had to incur 
any of the costs with regard to constructing those systems?
    Mr. Dawley. Madam Chair, the Trigen-Pepco relationship, if 
you recall in 1998, we came and said we were proposing to do 
this to outsource that. It's gone extremely well. I don't know 
if you had an opportunity recently to see the large helicopters 
that were lifting the cooling towers for the convention center 
on the roof. It was quite a media event, a couple weeks ago.
    That has gone along very well. I think at this point it's 
my understanding it's pretty much within budget. As you know, 
they have a huge part of the responsibility to do this, and 
they absorbed the responsibility and the costs for installing 
this; and, yes, this will allow some opportunity for them to 
sell energy. In fact, as part of the discussion that Eric and I 
have had about these other properties around the convention 
center, that may be--one of the incentives to help with that is 
that they can provide that cooling and heating actually from 
the plant, the central plant at the convention center. So it's 
gone very well.
    Mrs. Morella. And has the WCCA had to put any money in?
    Mr. Dawley. We haven't put any in. It's all their money at 
this point.
    Mrs. Morella. They've done it. So it's proceeding along 
according to schedule?
    Mr. Dawley. Yes.
    Mrs. Morella. You've got that all worked out.
    Let me ask another question with regard to the Metro that's 
being planned. Does it appear that the $25 million that the 
Federal Government will contribute for the funding of the Metro 
station, plus interest earned on the funds to date, will cover 
the estimated costs of the Metro station?
    Mr. Brazil. I feel like I should just say no to that 
because I know the costs will go higher. So I don't know 
exactly the answer to that question yet. I had heard there did 
look like there were some cost overages, a little bit, and that 
they were working to bring them back down within budget; but I 
don't have the answer to that today.
    Mrs. Morella. Will you keep us apprised of that?
    Mr. Brazil. I will.
    Mrs. Morella. And of how it's proceeding and if there are 
any additional costs, what they would be?
    Well, as I look to the hearing that we've had and the GAO 
report that motivated it, it appears as though you have said 
that the costs will be $799 million. There is--you'll be able 
to handle it. There's a $6 million surplus that's available. 
You estimate the dedicated taxes at $65.3 million, but even if 
it goes down, it won't go down any lower, you say, to $60 
million.
    Now let me ask you about, when are you going to sign the 
GMP?
    Mr. Dawley. There is a board meeting scheduled for next 
Friday. We had--my board of directors had an in-depth 
discussion at the Board meeting last Thursday on the GMP, and 
this was literally worked on right up to the morning of our 
Board meeting. So we explained all of the details of it in our 
Board meeting on the 25th to make a vote on. Clark has agreed 
to the reset GMP, and our board of directors will officially 
approve it on January 25th.
    Mrs. Morella. January. And so the decision will be made 
then, and we may have--the big signing take place at that 
particular point.
    Well, I hope you know that this subcommittee will continue 
to monitor very closely, because we feel, as you do, that the 
convention center is critically important. We want it to 
proceed on schedule. We don't want the cost overruns. We want 
to know that you've got your accountability all in order and 
all of the exigencies also considered. So I have no other 
questions, unless--first of all, do any of you want to make any 
final comments?
    Mr. Dawley. I just want to thank you for this opportunity 
to come and brief you on where we are; and as I said, if you 
look at where we've been and where we're going, we're confident 
that we're going to get there.
    Mrs. Morella. Uh-huh. It seems that way.
    Ms. Norton, any final questions?
    Well, I want to thank you all for being here, and, again, I 
think it's--we have made some great progress, from what we have 
seen, from our point of view. We congratulate you on that. GAO, 
keep watching, and we will all keep watching too.
    So my thanks to all of you for being here, and just before 
I adjourn, I want to recognize my staff who are here. On the 
majority side, Russell Smith as staff director; Robert White, 
communications director; Matt Batt, legislative assistant and 
clerk; Shalley Kim, staff assistant; Heea Vazirani-Fales, 
counsel/deputy director.
    On the minority side, John Bouker, who is the counsel; Jean 
Gosa, the minority clerk.
    Thanks, all of you. The meeting is now adjourned.
    [Whereupon, at 10:45 a.m., the subcommittee was adjourned.]

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