The general contracting company responsible for building Signal Hill’s police station suddenly stopped construction last week with little explanation, City officials confirmed at last Tuesday’s City Council meeting and in interviews this week. Irvine-based FTR International gave no real warning to the City that it would abandon work on an estimated contract worth almost $8.7 million, according to Deputy City Manager Charlie Honeycutt.
“It was…news to us because we had seen a lot of process occur on the building, particularly since after the holidays things really started to ramp up,” Honeycutt said in a telephone interview Wednesday, adding that “there was a flurry of construction activity” on the morning of Feb.15. However, later that day, Honeycutt said, a project manager for FTR told an on-site construction manager unexpected news: FTR has withdrawn from the job and laid off employees.
For now, the site on the corner of 27th Street and Walnut Avenue is much quieter. The police station is about 70 percent completed and had been slated to be finished by the end of July, according to Honeycutt. He said that he’s made several attempts to contact FTR, but he has not received any real official response from the company.
According to Honeycutt, FTR has stopped work on other projects for other entities in Southern California, however at press time, the Signal Tribune has been unable to independently verify with FTR’s clients that there have been other similar instances in which FTR has abandoned its clients’ work sites. FTR enjoyed a reputation for a number of noteworthy projects throughout the area. FTR completed an operations building last year at Pier G in the Port of Long Beach and is close to finishing an administrations building, according to the communication department at the Port.
FTR has failed to respond to any inquiries by press time.
City Attorney David Aleshire explained at the Tuesday City Council that the City had monitored FTR closely last year after news reports revealed problems between FTR and its major client, the Los Angeles Community College District (LACCD). Earlier this month, the Board of Trustees from the LACCD released a statement indicating that the District has barred FTR from future contracts with the District’s $6-billion building program for the next five years. The District pointed to major problems with the quality of FTR’s work on past projects. Miguel Santiago, who serves as the president to the LACCD’s Board of Trustees, called the action “a blow against shoddy work,” according to the statement.
Aleshire said that while FTR’s financial situation is unknown, LACCD’s decision may have affected FTR’s ability to continue other projects. The city attorney said that Signal Hill’s police department project had a surety bond through Arch Insurance Company for the full contract amount that totaled almost $8.7 million. He acknowledged that Honeycutt was already meeting with Arch to ensure that the project continues soon. Arch will have to determine how much work was done and how much had already been paid. They’ll also have to find a new contractor, according to Aleshire. The city attorney explained the terms of the surety bond and the steps that Arch will need to take in partnership with the City management for work to resume under a new contractor.
“In a perfect world, they’d find a contractor that would agree for the amount of money that’s left and any work that’s left. That contractor will step in and perform the work, under contract with a surety,” Aleshire said in an interview Tuesday night. “So the surety wants to bring somebody in, and the surety wants to hopefully not spend any more money than the money that we’re holding, but the bond that the surety posted with us is for the full amount of the contract.”
The city attorney explained to the Council that the work will resume soon.
“Even though there will be steps to go through, [we are] confident that this will be seen as not a Signal Hill issue,” Aleshire said at Tuesday’s Council meeting. “It really involves the FTR’s issues with all of their different contracts. And so we are confident that we will be able to work with Arch and come in and perform the contract.”
The deputy city manager said at the Signal Hill police station site there were no quality issues with FTR’s work. Honeycutt largely credited Paul Buckley, the construction manager, for the assurance that the City isn’t experiencing the same workmanship issues that the LACCD said that they experienced with FTR. Buckley is responsible for ensuring that the contractors conform to the approved plans. He works for Simplus Management Company. The construction manager will continue to oversee the project through the transition, according to Honeycutt.
“We’ve got a lot of experience on the City’s project management team,” Honeycutt said during his interview Wednesday. “So…we’re not panicking here. Things are under control. This project will get finished.” Honeycutt estimated that it may take from three weeks to a month before we see any activity resume, but he said the City would make every effort to work with the bond company to shorten that time period.
The construction had already been slowed down by three months. Rain had already delayed work, especially during the initial construction that began around November 2010. There’s a roof on the building, and there are windows in place. City Manager Ken Farfsing said that there are sand bags on the site in case of bad weather.
The city manager acknowledged that some may question why the City chose FTR’s bid to be the general contractor. The contract was finalized before news reports revealed FTR’s problems with the LACCD, and FTR’s bid was the lowest, according to Farfsing.
“And if you don’t award to the lowest responsible bidder, you could end up in a lawsuit,” Farfsing said. “So they were basically the responsible bidder, and we had no reason to really believe that they would basically have this amount of problems.”
Other City Council highlights
Affordable housing In a first-reading vote, the Council adopted an ordinance to amend a zoning ordinance to change development standards at the affordable housing site at 1500 Hill St. They also adopted a resolution to change the general plan. According to a staff report from Community Development Director Scott Charney, the State of California rejected the Housing Element portion of the General Plan. The community director said the State primarily objected to the suitability of the property on Hill Street for affordable housing because it is located on a previously industrial site. Through these proposed changes to the zoning ordinance and general plan, the City is making another attempt to get the Housing Element certified to show that its housing projects have been complied with and have gone above the state requirements to assure the State that it is an appropriate site for housing, Charney explained in an interview Thursday. There would be another advantage because a number of grants require a certified element and there is a possible threat to carry over the obligation into the next planning period, Charney added.
Animal boarding/daycare In a second-reading vote, the Council adopted a zoning ordinance amendment to allow animal boarding and daycare as a permitted use in specific industrial zone districts. They also approved an ordinance that changed municipal codes dealing with noise and animal control to accommodate animal boarding/daycare.
CDBG funds The City Council authorized the city manager to approve the allocation of Community Development Block Grant (CDBG) funds. The amount of CDBG funding totals $86,550 and will allocate 15 percent to public-service projects and the balance to ADA improvements at Willow Street and Temple Avenue.
Successor agency appointments The mayor has appointed Councilmember Mike Noll and Pearl Yu to the seven-member oversight board that will oversee the City’s successor agency. Yu is an accountant with the finance department.
Payment schedules The successor agency amended and re-adopted obligation payment schedules following the dissolution of the City’s redevelopment agency. According to a staff report, the payment schedules have added specific budgets to reflect consulting and staff costs for the sale of properties. The payment schedules for the period of Jan. 1 to June 30, 2012 totals $40,105,499. The amount includes tax-sharing allotments and bond repayments, according to the staff report. Noll abstained from the vote.
The next Signal Hill City Council meeting is scheduled for March 6 in the City Council Chambers.