Burien Pays Out $2.75 Million Over 1st Ave. S. Construction Project Overruns
All outstanding claims by contractors for cost overruns during phase one of the 1st Ave. S. improvement project have been settled by Burien for just under $3 million.
City Council members agreed to pay $2.75 million to resolve claims against Burien by general contractor Frank Coluccio Construction Co. and subcontractors Active Construction Inc. and Terra Dynamics (read the settlement here, p. 25 of PDF file).
The June 6 settlement was reached through two days of mediation, said Burien City Attorney Craig Knutson.
Coluccio and its subcontractors earlier filed suit in King County Superior Court to recover claims of more than $8 million for cost overruns resulting from delays, for which they held the city responsible.
An Aug. 1 trial date had been set in this case.
Active Construction did a lot of the trenching for undergrounding utilities. Terra Dynamics did landscaping work.
The city council also settled with Trans Tech Electric Inc. on April 4, agreeing to pay the subcontractor $177,902 and an additional $12,453 to Coluccio for the contractor’s markup for work performed.
Trans Tech, which installed street lighting and traffic signals, had filed a claim for $602,500.
Although “the city had a number of defenses we would have used at trial,” Knutson said Burien “would have been subject to pretrial interest [on the monetary claims] at 12 percent, and possibly [plaintiffs’] attorneys’ fees….
“Given the uncertainties of a jury trying to figure out a very complicated construction case,” coupled with a possibility the city “would have to pay a lot more” than the mediated agreement, settling contractors’ claims was reasonable, he told The B-Town Blog.
“I don’t know why they settled, but they faced the same uncertainties … and contractors don’t like to go to trial over construction claims.” Ninety-five percent of such claims are settled before a trial begins.
“Both sides had put a lot of effort into the case, but had not yet taken depositions” – which cost a lot in attorneys’ fees – “so both sides had a real incentive” to reach a pre-trial settlement through mediation,” Knutson added.
However, Burien expects “to recover a significant amount of this settlement” through payments from Seattle City Light and also Comcast, which are still being negotiated, for problems with their utility lines that contributed to construction delays.
Final cost of the project is approximately $26.4 million.
Phase one of the 1st Ave. S. rebuilding and redesign project between S/SW 162nd St. and S/SW 146th St. got underway on May 15, 2006, with completion scheduled for Nov. 27, 2007.
But repeated delays extended this project by almost a year. Construction finally ended – although utility undergrounding remains to be done, along with additional street lighting and curb, gutter and landscaping work – on Oct. 10, 2008.
Phase one planning took place while Gary Long was still Burien city manager, and Stephen Clark was public works director when the work was done.
As work fell behind schedule in 2007, Clark blamed it on bad weather the previous winter along with a cement processing strike – and utility conflicts and unanticipated problems encountered beneath the surface of 1st Ave.
Many businesses along the street reported heavy financial losses, with some going out of business as the result of construction.