Update - 2 contractors pay $6.5M after mold befouls school

[Guest guest]

2 contractors pay $6.5M after mold befouls school

Asbury Park Press - Asbury Park,NJ*

By Bill Bowman • COASTAL MONMOUTH BUREAU • February 22, 2008

http://www.app.com/apps/pbcs.dll/articleAID=/20080222/NEWS/802220415/

1004/NEWS01

NEPTUNE — The architect and construction company blamed for the mold

infestation in Midtown Community School have agreed to pay about

half of the $13 million renovation costs.

But the third company blamed for the problem — the project's

management firm — made a settlement offer that was rejected by the

state Schools Development Authority, prompting the authority to

threaten a lawsuit to recoup the remaining $6.5 million and to

cancel all the company's contracts.

SSP Architectural Group and Construction agreed to pay the

settlement after a five-month arbitration period, SDA spokesman

Larry Hanover said Thursday.

has agreed to pay $4.5 million and SSP will pay $2 million,

Hanover said.

Negotiations with the project manager, Gilbane Building Co., did not

go as smoothly.

The SDA rejected Gilbane's final offer — an amount that wasn't

disclosed — on Feb. 21, sent the company official notice that it was

terminating all the company's contracts if it did not " cure " eight

contract violations by next Thursday.

The SDA letter, signed by CEO Weiner, also threatened a

lawsuit to recover the final $6.5 million.

Mold was found in exterior walls of the Midtown school early last

year, which forced a one-year delay in the building's opening and

meant the school's several hundred students and teachers would have

to spend another year in trailers parked adjacent to the school.

Workers had to remove the brick facade along several walls, remove

and replace the wallboard and then replace the brick facade.

The school is on schedule to open in September, school and state

officials said.

In agreeing to make the payments, and SSP admitted errors

that contributed to the mold.

" Gilbane, and SSP each failed to meet their contractual

obligations to the SDA, " Weiner said in a press release. " More

significantly, each company let down the schoolchildren of Neptune

and the taxpayers of New Jersey. "

Gilbane spokesman Wes Cotter declined to comment.

Working in 22 schools

Gilbane currently has contracts worth $57.8 million in 22 schools in

Neptune, Long Branch, Asbury Park, Barnegat and Vineland, Hanover

said.

All but about $5 million of the contracts' cost has been paid, he

said.

The Midtown school project was part of a regional contract which

covers 17 of the 22 affected schools in the township, Asbury Park,

Barnegat and Vineland, he said.

Hanover said all but $3.9 million of the contract's $23.6 million

cost has been paid.

Hanover said that the SDA will terminate all contracts if the

problems associated with the Midtown school project are not

addressed.

" The reason for the terminations is that we have this fundamental

difference in what the roles and responsibilities are for a project

management firm, " he said.

" If they wanted to cure the contract in question in this letter,

that would mean that they had a fundamental shift that's more in the

line of what we see, in which case everything would be up for

discussion as far as to continue on with them, " Hanover said.

Neptune Schools Superintendent Mooij said he was surprised by

the action.

" There were some quality projects built here while they were on

board, " he said. " But I'm sure the SDA had sufficient cause to

terminate their contractual obligations. "

Mooij said he was " pleased " that the SDA will allocate more people

to the Midtown project while it is looking for a new project manager.

" They said it should not affect the schedule, " he said.