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Leonardo contractor sues Salt Lake City for $1M

Published: Thursday, Feb. 23 2012 11:35 a.m. MST

A construction worker is silhouetted against the view of the east foothills as he works on the windows inside the new structure on Library square in downtown Salt Lake City.

Johanna Kirk, Deseret News Archives

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SALT LAKE CITY — The contractor hired by Salt Lake City to renovate and remodel the building that now houses The Leonardo is suing the city for failing to pay nearly $1 million for completed construction work.

In a lawsuit filed Wednesday in 3rd District Court, Ascent Construction Inc. alleges the city has breached the $5.8 million contract awarded to the company in June 2010 to transform the former city library at 209 E. 500 South into a science, technology and art center.

According to the lawsuit, the city has refused to pay for the work because it was not completed by the June 14, 2011, deadline. The project was not completed until Aug. 17, which delayed the planned spring 2011 opening until Oct. 8.

The responsibility for those delays is the crux of the lawsuit. Ascent Construction alleges that the city and the independent contractor it hired as project manager, Larry Migliaccio, were to blame. Migliaccio also is named as a defendant in the lawsuit, as is his employer, Parsons Brinckerhoff Inc.

City spokesman Art Raymond said Wednesday the city had not yet been served with the lawsuit. He said city policy prevents officials from commenting on pending litigation.

The lawsuit states that "issues arose that caused substantial delays in construction" shortly after the contract was awarded and continued throughout the construction process. Those issues, according to the lawsuit, "were not caused or controlled" by the contractor.

The lawsuit alleges the city was slow in issuing building permits and that it required "numerous and extensive design changes … throughout the project," even after the June 14 deadline.

The city and its architect also "were repeatedly slow in resolving design issues and making decisions" on the project, as well as when "reviewing, processing and paying invoices" submitted by the contractor, according to the lawsuit.

As of April 15, the contractor had been paid 40 percent of the contract price, even though Ascent Construction had completed 80 percent of the work, the lawsuit states.

Other delays caused by outside forces included changes in city management — including the accidental death of project manager Steve England — and an unseasonably wet spring. "However, the city refused to grant extensions to the completion deadline" to account for weather-related delays.

The lawsuit also alleges that the city required the contractor to make specific improvements in order to pass FEMA inspections but then ordered the contractor to redo and revise that work after it passed inspection.

The original deadline for work to be completed was Jan. 31, though that deadline was extended to June 14. The lawsuit alleges that city officials were aware that the June 14 deadline "was unreasonable and impossible for the (contractor) to meet under the circumstances, yet refused on multiple occasions to grant extensions of the completion deadline."

The lawsuit alleges that the city refused to extend the deadline in order to take advantage of a contract provision that would allow the city to "deduct and retain liquidated damages out of any money that may be due (to the contractor)" if it failed to meet the deadlines. The contract stipulated that the city could deduct $5,000 for each day after the contract expired until the work was completed, according to the lawsuit.

Instead of paying the nearly $1 million the contractor says is owed for work completed, the city has agreed to pay $53,000 — and only if the contractor performs additional work, according to the lawsuit.

E-mail: jpage@desnews.com

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