Update - State files $6.5M lawsuit over school's mold contamination

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State files $6.5M lawsuit over school's mold contamination

Thursday, June 19, 2008

The Star-Ledger - NJ.com - Newark,NJ*

BY DUNSTAN McNICHOL

Star-Ledger Staff

http://www.nj.com/news/ledger/jersey/index.ssf?/base/news-

10/1213850282223400.xml & coll=1

State officials yesterday announced a lawsuit seeking more than $6.5

million in damages from the Gilbane Building Co., saying the firm

failed to alert the state to mold contamination at a Neptune school

building project.

Gilbane, in turn, refuted the state's claims and promised to file a

countersuit.

Discovery of mold in the walls of a partially built Neptune

Community Middle School last year forced demolition of portions of

the school that had been built. The problems delayed the project by

a year and added $13 million to the cost of the school.

In their lawsuit, filed in Superior Court in Monmouth County, the

state Schools Development Authority contends Gilbane failed to

protect the state's interests and never informed officials of the

mold problem.

" Gilbane's responsibility was to be the eyes and ears of the SDA and

the taxpayers of New Jersey on the project, " said Weiner,

chief executive officer of the schools authority.

The lawsuit seeks damages in excess of $6.5 million from Gilbane for

the portion of the cost of repairing the mold problem and recovery

of a portion of the fees paid to Gilbane. The state has already

collected $6.5 million from other builders and architects involved

in the project.

Gilbane issued a statement in response to the filing of the suit.

" Gilbane vehemently denies the specious allegations in the School

Development Authority's complaint, and will disclose the true source

of the problems at Neptune Community School in its counter-suit,

which will be filed shortly, " said Wes Cotter, Gilbane's director of

communications. " It will be clear Gilbane lived up to its

responsibilities and repeatedly offered valuable advice to the SDA,

which they chose to ignore at their detriment. "

Gilbane has collected more than $50 million in fees from the state's

school construction program, including $24 million for serving as a

project manager. In February, after mediation talks over the Neptune

project broke down, the authority fired Gilbane from all 23 jobs it

was handling.

The firm continues to be eligible for other public work in New

Jersey, and is handling the $4.6 million expansion of Rutgers

University football stadium.

The lawsuit comes as state legislators are grappling with a plan to

authorize at least $2.5 billion in new borrowing for the school

construction program, which was beset by cost overruns and waste

during its first years.

Since its launch, the program has spent all $8.6 billion allocated

to it. Without new funds, Weiner said, the program will begin

winding down next year.

Debate over new borrowing for the construction program is among

several contentious issues threatening to tie up resolution of the

state's proposed $32.9 billion state budget for the fiscal year that

begins July 1.