Contractor and subcontractors agree town will get half a million
Tuesday night after a short closed session the Wake Forest commissioners unanimously agreed to a settlement with the contractor and subcontractors for the new town hall in which they agree to pay the town $300,000 and let the town retain the $205,000 plus interest that the contractor, Heaton Construction, claimed was owed it. The net to the town is $507,767.75.
In addition, Little Diversified Architectural Consulting Inc., the architect for the building, and CLH Design, the engineering firm hired by Little, both agreed to waive any claims for the money they said they were owed because of the time extension Heaton needed to complete the building. “It is an avoided cost to the Town,” Town Manager Mark Williams said Wednesday while making comments about the settlement.
That net to the town of $507,767.75 will nicely cover the cost, about $506,000, Williams said, it incurred in repairing the problems. It will not cover the cost of hiring Stafford Consulting Engineers to determine why the roof and the windows and the foundation leaked nor will it cover the attorney fees charged to respond to the suit filed by Heaton and the subsequent negotiations. Those numbers were not available Wednesday.
“The Town is absorbing the costs of the investigation and is being reimbursed for the cost of the actual fix,” Williams said.
The settlement avoids what Williams said could have been a lengthy court battle, most recently set to begin in Wake Superior Court on Oct. 27, because of the number of plaintiffs and defendants.
“I believe the settlement is a good thing for the town,” Mayor Vivian Jones said Wednesday. “We have recovered the costs of the repairs to the building which was the primary purpose. I believe it was a thoughtful decision made by the board to settle. Further negotiations might have led to the court case which was looming and that would have meant substantial legal costs that very possibly would not have benefitted us at all. I believe the board made the best decision.”
The random leaks, apparently dependent on the intensity, direction and speed of the wind during a rainstorm, were discovered as soon as the town staff moved into the building in 2010, six months after the last extended completion date. When ground was broken in May of 2008 the projected completion date was December of 2009, the town’s centennial.
After Stafford’s engineers found that the subcontractor hired to install the windows had failed to put flashing between the windows and the walls and also failed to put in deflector dams to channel water away from the building’s interior. Other deficiencies were found on the roof and in the foundation.
EDS (Exterior Diagnostic Services of Apex) began work in December to correct all the problems and finished late this spring.
Heaton had offered to return with appropriate subcontractors to repair the defects, but the town and its attorneys said that was not appropriate. Heaton’s initial contract was for $11,437,000, less than the $12.6 million architect Steven Hawley had estimated. During construction, more than 30 subcontractors were on the site at different times. In December 2013, AttorneyCharles George with Myrick, Robbins, Yates, and Ponton LLP, the town’s law firm, said only $11.2 million had been paid to Heaton.
While Stafford was at work identifying defects, Heaton sued the town, its architect for the building, Little Diversified, and the engineering firm, CLH Design in early 2011, claiming the town had not paid them for all the work they had performed and that they were owed for early completion.
Heaton claimed it was owed $100,000 for change orders informally agreed to but never paid though the work was done.
The town countersued Heaton and later, in 2012, added Hanover Insurance Company, a performance bond company as a defendant. Hanover had guaranteed Heaton’s work on the project would be satisfactory and any hidden defects found within a year would be repaired.
Also in 2012 Heaton amended its suit to add three subcontractors: Raleigh Glass & Mirror Company, Triangle Caulking & Waterproofing and ETC Concrete Construction.
The settlement does not mean any of the parties aside from the town are admitting culpability for the defects. “No one is admitting anything, but they are willing to settle to avoid further costs of a court case,” Williams said.
