Denver International Airport (DEN) has terminated its contract with Great Hall Partners (GHP) for the renovation of the airport’s Great Hall. Construction of the Great Hall began in July 2018 but has been stymied by rising costs, delays and other challenges.
The original project was a public-private partnership with Great Hall Partners, comprised of Ferrovial Airports, JLC Infrastructure and Saunders Concessions. The 34-year agreement called for Great Hall Partners to design and construct all improvements followed by 30 years of operations and maintenance within specific commercial areas of the terminal. The total cost to design and build the project was estimated at $650-770 million, which included a $120 million airport-controlled contingency.
DEN says it will hire a new contractor to complete the project. Unlike under its deal with Great Hall Partners, the new contractor will be responsible for construction only and not operations and maintenance or the commercial program. DEN will operate any commercial development and will retain 100 percent of the revenues.
The airport noted that “many factors” contributed to the airport and city’s decision.
“The most notable is the issue we discovered with the concrete compressive strength in the terminal being less than what was noted in plans,” Day said in an email to employees today. She noted that testing proved that the concrete is safe for construction to proceed.
“While we now know the concrete is safe for construction to proceed, we also had some time to better evaluate how the Great Hall Project was going,” Day added in the email. “We have been working with our developer, Great Hall Partners, trying to reach an agreement on how to deal with the concrete issue, what the impacts to the schedule will be and how to deliver some of the necessary changes to the project as we’ve progressed in design. Over the past eight months, we’ve negotiated these issues, spent time in mediation and worked hard to reach an agreement. Unfortunately, we were not successful in doing so. We have decided it is in the best interest of DEN and the city to proceed in another direction and as a result have terminated our contract and will part ways with GHP.”
“This was unexpected and not the outcome we were hoping for, but our focus has always been on doing what is best for the airport and our community and that means we must take a different path,” Day wrote.
As part of this termination, GHP has no more than 90 days to vacate the project site, DEN said. At press time, GHP officials had not returned phone calls seeking comment.
DEN will pay termination fees as a result of its decision, including refunding Great Hall Partners’ portion of the funding they contributed to the project (about 25 percent of the design and construction cost), along with contract breakage costs and lost return on investment.
The total termination payment amount has not yet been finalized and this amount is in addition to the amount DEN will pay to complete the project with a new contractor, the airport said. The design and construction cost of the project will remain at the original budgeted amount of $770 million with contingency. DEN will own all design work and construction performed to date.