Dec 28, 2007 7:35 pm US/Eastern
Miami History Proves Projects Go Over Budget
MIAMI (CBS4) ―
This month Miami-Dade County and City commissioners passed an ambitious $3 billion spending plan for the future. The Downtown mega-plan includes a new baseball stadium and a tunnel for traffic into the Port of Miami. But a trip down memory lane and found--if history serves us right--the $3 billion price tag is likely just the beginning.
In 1977 Miami-Dade commissioners envisioned a Metrorail rolling from Dadeland to Downtown. With the feds carrying 80% of the cost, the budget was $776 million dollars. When the rail opened seven years later, the total cost topped $1.1 billion—over budget by $324 million.
But that was alright, because we soon had a train that dropped us off at the foot of our new prized Miami Arena. We paid the bargain price of $52 million. A decade later, the Miami Heat moved out of the pink elephant. It sold at auction for $28 million, a loss.
In the 90's the spending continued. The county commissioners approved $500 million for a new north terminal at Miami International Airport. Current estimates today have it opening 11 years late… for $2.85 billion–-five times more than budgeted.
And then there is the county's latest crown jewel: The Performing Arts Center. In 1996, it was estimated to cost $169 million. A decade later, the budget ballooned to $412 million. Now open and operating at a loss, the actual retail cost of the center was $473 million.
The PAC's debt, $473 million, is actually included in the new $3 billion spending plan county and city leaders approved this month. While no one can predict things like hurricanes, material costs, and labor shortages, we can learn from history.
That a $525 million Marlins Stadium won't cost $525 million--the same can be said for a $914 million dollar tunnel to the Port of Miami.
The history of three projects–-the Carnival Center, Metrorail, and Miami International Airport—shows that on average we are off by about 226 percent. In other words, historically, if the plan calls for $3 billion then it's a $6 billion plan.
We contacted the people responsible for budgets at Miami-Dade County for things such as the PAC and stadiums. They were all out on vacation, but perhaps when they come back they can show us how they come up with these estimates--maybe even show us a major project that came in under budget.
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