Palo Alto officially terminated Flintco Pacific Inc. from the Mitchell Park library project due to what a letter on the city's website calls “a lengthy history of Flintco’s failure to pursue and prosecute the work.”
Originally intended to be completed in June 2012, the Mitchell Park library project is the largest expenditure out of a $78-million bond referendum passed in 2008. Palo Alto public works director Michael Sartor says the 56,000-sq-ft facility is expected to be finished in 2014, although that depends on whether the surety company will hire a new contractor or if the city will have to find a replacement.
The Mitchell Park library project drew media attention in mid-2012 due to delays, a doubling of the contingency fund, 700 design revisions by architect Group4 Architecture and more than $1 million in change orders.
The contractor blames the problems on the large number of changes and the owner's unwillingness to make progress payments.
Flintco Pacific’s bid for the project was $24.3 million, well below the city engineer’s estimate of the project cost, $32 million. Work on the project began in September 2011.
According to a Frequently Asked Questions document on the Palo Alto city website, city officials estimate the present cost of the project, with change orders, at $28 million. They also believe that the remainder of the project’s costs will remain below the engineer’s estimate.
“Back in May, 2013, Flintco told the City that it would complete work in late November 2013,” writes James Keene, Palo Alto city manager, in the termination letter.
Keene writes that later Flintco Pacific agreed to obtain a temporary certificate of occupancy by November 2013 so that library employees could begin moving books and inventory into the facility. As of December, no temporary certificate had been acquired and the city issued a notice of default on December 4.
The notice gave the Roseville, Calif.-based contractor ten days to remedy the claimed breaches of contract. The letter of termination says that more than a month later, Flintco Pacific has yet to provide a plan to achieve substantial completion or cure the defaults.
Flintco Pacific had not issued a response to the city as of Monday, but in an emailed statement Senior Vice Presidentt John Stump wrote, “We strongly dispute the accusations made by the city of Palo Alto and their decision to terminate our contract [which] will only serve to increase costs and further delay completion. We are consulting with our legal counsel regarding next steps.”
Estimates of the project’s completion in the letter of termination and from Sartor hover at 90%, but Stump writes, “The reality is that this project is 99% complete because of the tremendous commitment of Flintco Pacific and our subcontractors, despite the failure of the City to make progress payments or process the countless design revisions that plague this project.”
In January 2013, Alberici Corp. acquired Flintco LLC from Flintco Holdings LLC. Flintco Holdings continues to operate Flintco Pacific and Flintco Builders independently.
According to Stump, the current leadership of Flintco Pacific is president and CEO Tom Maxwell, who “provides services to Flintco Pacific, Inc. on a contract basis” and is the retired chief executive of Flintco prior to 2013.
Both Sartor and Stump state that the situation has become litigious. Further legal proceedings have not been announced but seem likely in the immediate future.