By Adam Aasen
The Carmel Redevelopment Commission has settled its lawsuit with Hagerman Construction in regard to money the company claimed it was owed from working on The Palladium.
The lawsuit could have cost the city about $2 million, but CRC officials said they didn’t owe that much money.
Carmel Mayor Jim Brainard and Jeff Hagerman, Chairman of Hagerman Construction Corporation, provided additional information concerning the resolution of pending litigation involving the construction of the Palladium which opened in November 2010.
Both Hagerman and Brainard stressed that the lawsuit was a result of a business disagreement over what was owed to Hagerman as a result of delays during the complex construction project. Brainard added that the quality of the work was not at issue but rather the lawsuit was a business disagreement over contract terms.
On May 7 the CRC met in executive session and then voted in public to approve a settlement amount of $730,000.
CRC Executive Director Corrie Meyer said she is happy with the savings and eager to move on.
“We are pleased to be able to come to terms after lengthy but courteous and professional negotiations between Hagerman Construction and the CRC,” she said. “We feel this settlement will be good for all parties involved and we can now move forward with the business of redeveloping our city.”
In total, the CRC has spent $1,727,797.85 in legal fees relating to The Center for the Performing Arts.
“Keep in mind that it is not uncommon for building projects of this complexity and magnitude to have legal issues associated with construction,” city spokeswoman Nancy Heck said.
Now the city hopes to put all of its legal issues regarding The Palladium to rest.
The CRC was also previously dealing with a lawsuit involving Bloomington-based contractor Crider & Crider.
In 2011, the original claim for $2,634,434 was filed in a combined Crider/Hagerman lawsuit. In August 2013, the litigants proposed a settlement of the combined lawsuit of $2,011,746, but the CRC did not agree to that amount. The Crider portion was settled in February 2014 for $575,000.
Combined with the proposed Hagerman settlement, the new combined total would be $1,305,000, which is $1,329,643 less than the original 2011 claim.
The CRC will use $590,000 in funds held back during construction to pay for the settlement. The rest of the funds will come from savings in expected legal fees, Meyer said in a statement.
The CRC said they would make payments on the Crider lawsuit and would in some cases delay projects to accommodate the costs, leading to questions about the budget from some city council members.
“My only concern is the statement made that much of it would be paid from a retainage fund, yet we have been told there is no retainage fund,” Councilor Rick Sharp said in a statement. “Where will the money be found and how soon must it be paid?”
The CRC still has an unresolved lawsuit against Steel Supply & Engineering which it is suing over problems relating to the Palladium’s roof.[gview file=”http://youarecurrent.com/wp-content/uploads/2014/05/2014-05-12-Fully-executed-Settlement-Agreement-and-Release-by-and-be….pdf”]