Group Health buys into hall

It’s been almost two years and $89 million in the making, but the end is near.

In a few months, Spokane residents will get their first look at their investment in the Spokane Convention Center expansion.

And they’ll have to get used to a new name, as well: The Group Health Exhibit Hall.

The name had not been announced publicly, until it slipped out during a meeting Tuesday of the Spokane Public Facilities District.

Group Health announced in a press release that it has entered a multiyear contract to be the name sponsor for the new exhibit hall. As part of that deal, which is worth $75,000 a year, Group Health also has obtained exclusive advertising rights among health insurance providers, medical providers and hospitals for the Spokane Arena, the company said.

The facilities district continues to pursue the sale of naming rights to the Arena, Convention Center and Opera House, said Executive Director Kevin Twohig.

On July 20, Spokane residents can finally take a peek at the new exhibit hall, the 100,000-square-foot expansion residents voted to pay for with additional taxes in May of 2002.

The Spokane Public Facilities District is expecting to receive the keys to the new structure in early June, about two years after the first ceremonial shovel was thrust into the ground, launching the construction project.

The facilities district plans to hold an invitation-only event on the evening of July 19, to include the building dedication and tours for event and meeting planners, some of whom may sign contracts to hold their conventions at the new facility, said Kevin Twohig, the district’s executive director. That event will be followed with public tours on July 20.

Tourism officials are working on 36 potential event deals that would not have been possible without the expanded space, said Keith Backsen, director of convention sales for the Spokane Regional Convention and Visitors Bureau. That includes the National Association of Postmasters of the United States, which is considering the Spokane Convention Center for its 2010 convention, Backsen said at the Public Facilities District meeting Tuesday.

Though the expansion project is two months ahead of schedule, it was not without setbacks. Dramatic increases in construction material costs, which set in shortly after the groundbreaking, were responsible for most of an $8.7 million cost overrun. The district, its engineers and architects and the project contractor, spent months in meetings to determine who would shoulder which costs.

The district ended up absorbing $3 million of the overruns, with the contractor assuming $1.3 million and saying it did not expect to make a profit. The remainder of the overruns was made up by scaling back the construction, either through selection of alternate materials or slight changes in design.

A few months later, the district realized a $9.1 million windfall when it discovered new legislation enabled it to sell its option to refinance the bonds sold to pay for the project. The option was sold to Lehman Bros. of Seattle, which raised the total budget for the project from $80 million to $89 million. Originally, $77 million worth of bonds were sold, but interest income raised those revenues to $80 million.

The $9.1 million will cover the district’s portion of the cost overruns and will enable it to spend more on renovations to the existing Convention Center, set to begin as soon as the expansion project is complete. About $9 million will be spent converting the existing center into meeting rooms and ballrooms, with project completion expected in the summer of 2007.