Denver International Airport CEO Kim Day Changes Course, Takes Blame For Great Hall Fiasco
DENVER (CBS4) - After initially blaming most of the problems with the troubled Great Hall redevelopment project on the developer, Denver International Airport CEO Kim Day has changed course. She now admits in detail how airport administrators and the city botched the project before it even started, entering into a bad contract, failing to provide proper oversight, making decisions too slowly and giving the project developer "too long a leash."
The startling reversal about accountability for the stalled Great Hall Project came in multiple closed door meetings between Day and Denver city council members in recent weeks.
"I take full responsibility," Day told council members in the executive sessions, which are not open to the public.
CBS4 learned of the briefings, which were aimed at showing council members "lessons learned," by DIA administrators from the terminal renovation. They laid out how the repeated missteps in the Great Hall Project would provide a foundation for doing things differently on future airport construction projects.
Day's "mea culpa," as one council member called it, represents the most detailed accounting yet from the airport's top executive on how the massive $650 million construction project went off the rails. CBS4 contacted multiple council members regarding the executive sessions and tapped into other information sources to glean details of how the airport CEO now says the project spun out of control.
The terminal renovation began in 2018 aimed at relocating TSA security checkpoints, improving passenger flow and adding retail space. The 25-year-old airport needed the massive update according to airport managers, as it was designed to accommodate 50 million annual passengers, but last year, nearly 70 million passengers moved through DIA.
The city hired Great Hall Partners - a consortium of contractors anchored by Madrid-based Ferrovial Airports - with an agreement to have the terminal redevelopment completed by late 2021. But the makeover was almost immediately beset by delays due to concerns about concrete strength in the terminal, friction between the developer and airport administrators, and numerous change orders issued by the airport. After Great Hall Partners forecast up to $310 million in cost overruns and years of delays, Mayor Michael Hancock fired the developer in August of 2019.
The airport and the developer are currently negotiating what are known as "breakage fees;" the amount of money the airport will have to pay the developer for cancelling the contract. Several information sources indicate the negotiations are nearing completion and the airport will likely pay more than $20 million to the developer as a penalty for breaking the contract.
As those negotiations continue, council members are digesting what they were recently told by Day.
She told city council members:
- Even before construction began, there were built-in problems since the projects feasibility study was ill-conceived and poorly structured
- The contract for the project was also poorly constructed, and Day said her team never really knew what the true costs or the actual schedule would be.
- Day called Great Hall Partners and Ferrovial "a bad partner" who based their cost estimates on low quality materials which were not suitable for the airport and then had to be upgraded, increasing the costs of the project.
- She said DIA had no way to track the construction progress.
- The airport CEO admitted she and her team took too long to make decisions and were not "technically knowledgeable." She went on to say the airport did not have the right team to manage the job. She said the airport team was inexperienced in this type of project and "decision making authority was unclear."
- Day said the project was also slowed by a level of complexity that was simply too much for a traditional permitting and inspection process.
- Although airlines were consulted on the project, she said their suggestions were dismissed as her team was not really open to airline suggestions.
- Day placed blame on the developer in the city council briefings, saying the developer was given "too long a leash." She said Great Hall partners was not held accountable and was reluctant to make changes. She conceded DIA administrators should have acted faster when it was clear things weren't changing.
Several sources described Day as emotional as she took responsibility for the snafus.
"This project starts and stops on my watch," said Day.
She previously defended the construction and hiring processes. Last August, at a news conference announcing the termination of the contract with Great Hall Partners, Day said, "We did not make a mistake hiring a developer. We went through a very intense procurement process."
Although she primarily blamed the developer, in broad terms, she acknowledged some airport culpability.
"There's no question we could have done things differently, but I am not going to take the fall for the fact they didn't give us the information that we needed to make decisions and then tell us we didn't make design decisions."
Hancock also hinted at issues with how the airport and city managed the project. In an interview in August, he said, "I can tell you we can improve this process. We have to get better at this. This is a very valuable and painful lesson for us to learn, but the goal is get better and that's something we are going to work to do."
In partially blaming herself, her staff and city processes for the terminal redevelopment meltdown, Day appeared to have surprised some council members who had previously only heard blame heaped on the project developer.
CBS4 asked DIA's top communications officer to discuss Day's "lessons learned" roadmap, but that request was denied.
"Due to the sensitive legal negotiations underway, we are unable to comment as to do so would put the best interests of the city and the people we serve at risk," wrote Stacey Stegman.
Day emphasized to council members that although she and her staff fell short, they always attempted to do the best job possible for the airport and the city.
After firing Great Hall Partners, DIA took over project management in November. City council approved a new $195 million contract this month for Hensel Phelps to act as the general contractor. Work in the terminal is expected to resume in March.
However, airport administrators now acknowledge that the project likely will not be completed until at least 2024, at least three years behind schedule.
