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Terms of settlement with builder released

Various construction delays apparently increased charges to the city by $615,000.

By JOHN FRANK
Published December 25, 2006

INVERNESS - Nine months after the ribbon was cut on the Inverness Government Center, the final price tag is tabulated: $6-million.

That's $255,468 over the projected $5.8-million, but less than what the city was billed.

City Manager Frank DiGiovanni disclosed for the first time last week the terms of a settlement with builder McCree Inc. of Orlando concerning more than $615,000 in contested construction charges.

The deal was reached after seven months of contract-ordered mediation with the threat of a lawsuit against the city looming over negotiations. Mediation and attorney's fees cost the city an additional $23,000.

Telling the City Council that he "did everything humanly possible to keep costs in line," DiGiovanni cast a sunny light on the expense, saying that being 4.4 percent over budget is standard in major construction projects.

"By simply looking at this building, I'd say we ended up with a darned good building," he said.

The dispute centered on the $615,000 in extra charges tacked on by the builder at the end of the project, according to the city and McCree attorney Chris Weiss.

Delays equal money in the construction business, DiGiovanni explained, so when materials like flooring and roofing tiles didn't arrive on time the costs still were adding up.

"Construction went longer and there were some changes," he said. "We feel the materials could have been ordered earlier. These things get argued. It's just part of managing a project."

The city began talks about a new city hall in 1995, but construction didn't come to fruition for the two-story 26,499-square-foot building until early November 2004.

And then there were delays - for various reasons, including an active hurricane season - that pushed the completion date from November 2005 to March 2006.

At the council meeting, DiGiovanni blamed the overruns on global events, such as Hurricane Katrina and an industrializing China, saying they were driving up construction prices and diverting natural resources.

Some council members blamed downtown business owner Winston C. Perry for the added expenses.

Perry was an outspoken critic of the planned government center, which he dubbed a "Taj Mahal" and "Ivory Tower." He filed a complaint with a environmental regulatory agency that delayed the planning phase by a month. DiGiovanni estimated that waiting 20 days on a construction project translates into about $175,000 extra costs.

"That delay cost us about that much money; it was frivolous at best," said council member John Sullivan, attacking what he called a "personal agenda of a business owner downtown."

"I find it ironic that the cost we are now going to authorize is basically" the same as the cost of a delay, echoed council member Jacquie Hepfer.

Council member Sophia Diaz-Fonseca had more of a problem with how the mediation took place without the council's knowledge.

"I just wish that council had been more aware of what was going on," she told DiGiovanni. "You kind of were out there on your own."

John Frank can be reached at jfrank@sptimes.com or 860-7312. 

[Last modified December 24, 2006, 20:36:33]