Money running out for new Denver Justice Center
By Tillie Fong 
| September 3, 2009 | 7:01 AM
One of two identical arraignment courtrooms in the new Denver Justice Center jail, which is scheduled to open next April. (RMI photo by Andy Piper)
The money budgeted for the construction of the new Denver Justice Center is quickly running out, and the city is planning to tap a different bond fund to help cover more than $3 million in unexpected project costs.
On Wednesday, members of the Denver City Council’s safety committee learned that the Justice Center already has spent close to 80 percent of its budget, with $347.7 million out of $441.3 million gone. Another $54.6 millon is spoken for, leaving a balance of $38.9 million.
As of last month, work on the new courthouse was 73 percent complete, with 80 percent of the construction of the new jail done, according to the city’s Web site tracking the Justice’s Center’s progress. The jail will open next April, and the courthouse will be ready next August.
Much of the funding — 85.6 percent, or $377.8 million — for the Justice Center project came from a bond issue approved by voters in 2005. The majority of the money has been spent in the past two years as construction work ramped up on the facility in downtown Denver.
The project also includes the costs for a new post office and parking garage (completed in June 2007) and the demolition of an old building at the Denver County Jail site off of Smith Road, replacing it with a 256-bed housing unit.
However, $3.1 million in additional costs have cropped up. A video visitation system at the jail will cost $1.35 million more than budgeted, and the city is scrambling to cover the loss of $1.74 million from a regional service fund that was supposed to pay for the demolition the building at the Smith Road site.
The city is tapping into a different bond fund to cover the $3.1 million. In 1998, Denver issued a bond to build three police stations, and that fund has $3.6 million left over.
“It can only be used for safety construction,” Ed Scholz, Denver’s budget director, said, explaining why those funds can be used for the Justice Center.
It was not clear Wednesday why the video visitation system will cost more than budgeted. The system will allow inmates to meet with visitors via video feed, without having to leave their cell blocks.
Councilman Doug Linkhart asked if the old through-the-glass visitation system could be substituted for the video system to save money.
Denver Undersheriff William Lovingier said that the new jail will have two areas – one on the fourth floor, and the other on the first floor — allowing for direct face-to-face contact with the inmates.
Larry Larson, project manager for the jail, also noted that the video visitation system has other uses, such as allowing attorneys to teleconference with their clients from their offices.
As for the demolition of the Smith Road building, “we don’t have the money in the capitol improvement fund,” Scholz said.
That $1.7 million also will be coming out of the 1998 bond fund.
Complicating the issue is the fact that the revenue for the construction of the new Smith Road housing unit is contingent on the sale of four parcels of land near the new Justice Center – essentially all three of the former Rocky Mountain News parking lots near West 14th Avenue and Elati Street, plus another property.
On Wednesday, however, some City Council members were reluctant to sell the four parcels.
“I want to keep the options open,” Councilwoman Jeanne Faatz said.
She said she didn’t want Denver to sell the lots at a loss because of the current state of the economy, then have to buy them back or lease them at a premium price later.
Linkhart noted that the lots might be needed to provide additional parking for people working at or visiting the Justice Center.
“I don’t think the parking garage will provide adequate parking,” he said.
Jeff Steinberg, director of the real estate division with Denver’s finance department, said other parcels of land could be sold instead of the four in question. He mentioned two: one at 52nd Avenue that the city is working with the Environmental Protection Agency to get out of the flood plain, and another at 3101 S. Havana St. It is unknown how much money the city could get for the two parcels.
Faatz said she would be willing to swap any city land in her district for one of the four parcels near the new Justice Center but said she didn’t know if Denver had any properties for sale in her area.
“This is a prime location,” she said of the four parcels. ”I would hate to see something as valuable as this to be the first thing to go out the door.”
Linkhart also wondered if the city could have more time to explore other funding options by pushing back the construction of the new building at Smith Road.
“If we delay Smith Road for a year, would that help us at all?” he asked. “I don’t think we would use the (new) Smith Road facility for some time.”
Construction on the Smith Road housing unit — estimated cost: $18 million — is not scheduled to start until next June, with completion in June 2012.
Faatz also noted that the city could grant the Smith Road facility an exemption from the 1 percent art requirement, which stipulates that capital improvements of more than $1 million must devote 1 percent of the project cost to artwork.
She estimates that the exemption would allow nearly $200,000 to be applied instead to the construction of the new facility. Another $500,000 could come from the 1998 bond fund.
“We should be able to cobble something together,” she said.
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WHERE IS THE MONEY GOING?
Out of the $441.3 million budgeted for the Denver Justice Center project, $353.7 million has gone toward construction costs, $26.7 million on design and $26.3 milion on land acquisition, which included buying the former Rocky Mountain News building at East Colfax Avenue and Elati Street.
Furniture, fixtures and equipment account for $13.7 milion, or 3.1 percent of the total budget. Project management takes up 1.7 percent, or $13.8 million, with another 1.5 percent or $6.6 million going to profesional fees and service permits. The remaining $6.6 million, or 1.5 percent, goes to administration and art.
courthouse, denver justice center, doug linkhart, jail, Jeanne Faatz
