DENVER (CBS4) – CBS4 has learned that the City of Denver moved Monday night to terminate the renovation contract for DIA’s troubled Great Hall project, telling the developer, Great Hall Partners, that it has been fired “for convenience” and saying ending the contract is “in the best interest” of the airport. Multiple sources familiar with the major turn of events confirmed the developments to CBS4.
Terminating a contract “for convenience” is a standard clause in government contracts which gives the government — in this case DIA and the City of Denver — the right to unilaterally end the contract without giving a specific reason. Sources told CBS4 that Denver officials delivered the news to Great Hall Partners via a letter sent overnight.
In July, Denver had threatened to end the contract. This week the city followed through on that threat. Sources say the termination will take effect in November, giving the current developer three months to wrap up.
That could potentially lead to the airport seeking a new developer to resume the work, and could also potentially lead to even more delays for DIA passengers than the three year delay that has previously been forecast.
Various DIA and city officials have not responded to CBS4 inquiries regarding the contract termination. When contacted by CBS4, a spokesperson for Great Hall Partners indicated she was not aware of the contract termination.
The terminal redevelopment — started in 2018 — was supposed to cost $650 million and be completed by 2021. But it has been beset by problems nearly from the start. Concerns about the strength of the concrete in the terminal, coupled with change orders from the airport, led Great Hall Partners to project a $311 million cost overrun and a projected delay of as much as three years.
Although DIA and Great Hall Partners engaged in mediation, attempting to resolve their differences, the two sides have sniped at each other for months and appeared to be drifting further apart.
In July, DIA sent the developer a series of letters accusing the developer of various levels of misconduct and unprofessionalism during the construction project. In one letter, DIA accused Great Hall Partners of “knowingly interfering with airport activities” and breaching its contract.
Great Hall Partners — spearheaded by a company called Ferrovial, based in Spain — made a number of claims regarding the project. Last Friday, Denver responded rejecting GHP’s assertions saying the developer was not entitled to any more time or compensation due to the earlier concrete concerns. In a letter dated Aug. 9, DIA dismissed Ferrovial’s assertions about needing more time and money due to concrete issues saying, “Developer failed to demonstrate that it mitigated any consequences” over the concrete issues.
One insider familiar with the overnight termination move said it was unclear what the financial fallout would be for the airport and how much Ferrovial and Great Hall Partners would receive due to the termination. But sources connected to the redevelopment say starting over with a new developer could potentially add even more delays on to the Great Hall project. A new developer would likely want to verify current terminal structural conditions and review the project in detail before resuming construction,and that could be a time consuming process.
Although Denver and airport officials have not responded to CBS4’s repeated calls and emails, several sources indicated Denver would likely release a statement or hold a news conference about the termination later on Tuesday.