News

Take Me Out to the Courtroom

The primary contractor for Bank One Ballpark is expected to file a lawsuit this week seeking $34 million in damages from the Maricopa County Stadium District, the Arizona Diamondbacks and the stadium's architects and construction manager.

The suit, which is to be filed in Maricopa County Superior Court, culminates months of acrimonious negotiations between the prime contractor, Perini/Tutor-Saliba, and representatives of the Diamondbacks and Maricopa County.

The lawsuit could result in a showdown between Maricopa County, which owns the stadium, and the Arizona Diamondbacks, which agreed to pay all costs above $253 million for the retractable-roof ballpark.

Cost overruns already have driven the price of the stadium up to $365 million. The Diamondbacks have not set aside funds with the county to cover any portion of the $34 million sought by Perini/Tutor-Saliba.

"There is no excess cost security for even one penny of the claim," says a source close to the negotiations.

If the Diamondbacks fail to pay legitimate cost overruns, the contractor's lawsuit is designed to attempt to collect the money from the county as well as other defendants, including all the limited partners who invested in the baseball team.

There appears to be little concern among county officials, however, that the Diamondbacks would fail to cover all construction costs, putting taxpayers at risk.

A source familiar with the Diamondbacks' legal position says there is no indication that the team or its managing partner, Jerry Colangelo, would try to avoid any legitimate payment.

"I have never heard him suggest he doesn't have the money. You just don't pay big claims without detail and support," the source says.

Stadium District director Bob Williams is also confident that the team will cover any legitimate expenses.

"The team picks up all costs over $253 million," Williams says.
Williams says the district and the team believe Perini/Tutor-Saliba is seeking far more money than entitled.

"We don't believe the claim has much merit," Williams says.
If the team declined to pay any legitimate construction claim, the stadium district could revoke the Diamondbacks' stadium lease.

Perini/Tutor-Saliba is filing the suit on behalf of itself and five subcontractors including Schuff Steel Company, University Mechanical & Engineering Contractors, Tpac, Wilson Electric Co., and B&B Glass.

A draft of the lawsuit obtained by New Times alleges the stadium district breached its contract with Perini/Tutor-Saliba by:

* Failing to pay for labor and materials.
* Failing to pay for extra work performed.
* Causing unexcused delays and disruptions to work progress.

* Failing to ensure that the district's consultants properly performed services.

* Furnishing defective plans, specifications and drawings.
* Failing to make timely payments to contractors.
* Failing to grant appropriate time extensions.

The draft suit makes nearly identical allegations against the Diamondbacks and its limited partners, the stadium architect, Ellerbe Becket Inc., and the construction manager, Huber, Hunt, and Nichols Inc.

Stadium District and Diamondbacks officials declined Tuesday to comment on the draft complaint until it is filed.

The draft lawsuit parallels a formal claim filed last summer by Perini/Tutor-Saliba seeking $34 million in cost overruns from the Diamondbacks. Settlement negotiations over the claim have continued since last May, with little progress, according to sources close to the discussions.

The lack of progress, sources say, caused Perini/Tutor-Saliba to prepare a lawsuit rather than seeking redress through an arbitration hearing as called for in the construction contracts.

Stadium contractors have not been pleased with the results of previous arbitration cases and decided they have a better chance in court, says an executive with one of the subcontractors who asked to remain anonymous.

Whether the contractors can bypass arbitration will be a key point in any litigation.

"The courts favor arbitration, and it's hard to bust out of arbitration clauses," says one legal expert familiar with the case.

Contractors appear to have a possible legal argument to avoid arbitration because of the size of their claim. The contracts required arbitration for any dispute less than $5 million.

The cost overrun dispute centers largely on the unique design of the stadium compared with other baseball parks built in the last decade.

"The decision to have natural grass and air conditioning, which in turn led to the requirement to have an enclosed stadium with a retractable roof, had a tremendous effect on the complexity, cost, and schedule which was not encountered at other facilities," Perini/Tutor-Saliba said in its claim to the stadium district.

The retractable roof added $70 million to the cost of the ballpark while greatly complicating construction activities. Despite the problems, contractors finished the stadium on time, but at a much higher cost, money they allege they're still owed, according to the draft complaint.

The lawsuit does not specify how much each contractor is seeking. But the claim filed with the stadium district last summer stated that Schuff Steel was owed at least $9 million, Perini/Tutor-Saliba $5.4 million, University Mechanical $3.8 million, Wilson Electric $1.7 million and B&B Glass $130,000.

Contact John Dougherty at his online address: [email protected]

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John Dougherty
Contact: John Dougherty