Costs rise for Wharton's Huntsman Hall

Huntsman Hall, the Wharton School's six-story, 320,000-square-foot business education complex, will finish on time but at a cost $9 million more than originally expected, officials said. University officials attributed the steep expense increase to a tight construction market across the region. The increase brings the total cost of the project to nearly $140 million. Vice President for Facilities Services Omar Blaik said the original estimates made over the summer were too low to cover construction expenses. "We went out to five construction companies to ask for five prices on construction costs -- all of the prices came in in a very close range and all were above the estimates for the project," Blaik said. The University Trustees approved the first estimates in the summer, but at their meeting last month, they approved the increased budget. The building -- named for Wharton alumnus Jon Huntsman, who donated $40 million to the project -- is scheduled for completion in the summer of 2002. It will house a 500-seat auditorium, classrooms for undergraduate and MBA students, administrative offices and four academic departments. Blaik said that the amount of construction going on across the region has resulted in heightened costs. Huntsman Hall was affected to a much greater degree than other campus construction because of the size of the project, he said. Craig Thomas, a senior economist with the economics research firm Dismal Science Inc., based in West Chester, Pa., said that a tight labor market has contributed to an increase in construction costs. "Skilled construction workers are particularly scarce and that's because we've had a booming construction market," he said. Thomas also indicated that costs of certain construction materials, such as drywall and steel, had recently increased. "After the Asian currency market [crisis], all commodities saw significant price drops," he said. "But now with the Asian economy [recovering]? you no longer have those very cheap commodities and steel is one of the commodities that has been affected." Scott Douglass, Wharton's senior vice president for administration and finance, said that despite the increased expenses, the project's costs would still be covered entirely by funds obtained by Wharton. "Several years ago, the school received a major gift that the donor has subsequently 'reallocated' to Huntsman Hall," Douglass wrote in an e-mail. "In addition the school has always known that a portion of the cost would be covered by operating surpluses in executive education, as well as discretionary funds available to the dean." Douglass said the project was a few days behind schedule due to snow earlier in the year, but is expected to be back on schedule by mid-April. "That sort of thing is to be expected in a project of this size," Douglass said. "[We are] very pleased with the status of the project."

Please note All comments are eligible for publication in The Daily Pennsylvanian.