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Leland ends town hall construction contract with builder

The Leland town board held a special meeting Thursday, July 17, where they voted unanimously to settle their dispute with contractor Paragon Building Corp. and mutually agree to end their association.

Town staff have waited more than six months to move into the 44,000-square-foot, winged building which will house the town staff and council chamber on one side and the Leland Police Department on the other.

The town hall completion date was Jan. 3, 2014, but problems with the project were apparent as anticipated move-in dates were announced and revised at town meetings throughout 2013.

Paragon was contracted to build the town hall June 6, 2012, and received the notice to proceed July 2, 2012. Paragon completed a substantial amount of the project by March 27, 2014, but several disputes arose between the town and contractor over the quality of some of the work, timing of completion of the work and payment for the project.

Once the official completion date came and went, the contractor was fined $500 a day, with the total reaching more than $90,000 before town officials decided to negotiate an ending to the contract.

The town and contractor met with a mediator to come to a settlement agreement June 20.

“The council believed this was our best decision so we can stop renting the police department building and stop making payment on a building we are not able to use,” Bozeman said.

“The main thing is we are ensuring the taxpayers are getting the best quality facility,” Mayor Pro Tem Pat Batleman said.

The terms of the agreement state the town will pay Paragon a total of $230,000, with the first $130,000 paid with the settlement’s approval by the town council. Another $50,000 will be paid after Paragon completes a punch list of repairs Leland asked for and the company will receive $50,000 more once nine roof panels are replaced.

Mark Hamlet, a construction attorney retained by Leland for the Paragon contract settlement, said the contractor gave up significant financial concessions and in turn the town waived the right to collect the late fees.

Paragon must meet the requirements of completing work on a training room by July 31, completing the punch list by Aug. 15 and replacing the nine roof panels by Aug. 20.

Completion of the work on the town hall will release Paragon from any claims or lawsuits by the town. And the full $230,000 payment will release Leland from any claims or lawsuits by the contractor.

Both sides state the agreement is not an admission of liability of any sort.

The agreement also states Paragon will still honor any warranty obligations for the new town hall, except for work the town hired Monteith Construction to develop a repair estimate for in the lobby, washrooms, break rooms, locker rooms and for repair of a wall in the council chamber.

The punch list Leland has required Paragon to complete includes repainting, gutter repairs and replacement, concrete cleaning, landscaping repair of ruts as well as several individual repair items throughout the building.

Leland staff hired Monteith Construction to create an estimate for the repairs the town wants made in the new town hall that they could not come to an agreement on with Paragon.

The town wants the lobby floor removed and repaired, a lobby wall repaired and repairs to work they found substandard in the washrooms, break room, locker room and council chamber. The estimate for the repair work came to $231,000.

Hamlet said the town hired Monteith to prepare the repair estimate as part of the negotiation with Paragon, but no plans have been made to go forward with the work.

“There is no contract with Monteith at this time,” Hamlet said.

“When they get through Aug. 15, we can go back and do the lobby floors and locker rooms,” Bozeman said.

Bozeman said town officials hope when the agreement is completed and the remaining work is contracted and finished, they will be able to move into the town hall by late September or early October.

“It would be nice to get in by our September meeting. Our anniversary date is Sept. 9. That would be ideal but that is probably not feasible. We think it will be October,” she said.

Brian Slattery is a staff writer for the Beacon. Reach him at 754-6890 orbslattery@brunswickbeacon.com.

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