News Release News Release The City of Palo Alto
Communications Department
250 Hamilton Ave
Palo Alto, CA 94301


PRESS RELEASE 12/16/2014
Subject :

City Settles Legal Issues With Flintco Related to Mitchell Park Construction
Contact : Molly Stump, City Attorney    650/329-2171
Claudia Keith, Chief Communications Officer    650/329-2607
Palo Alto, CA –The City of Palo Alto announced today that it has settled all legal claims with Flintco Pacific related to the construction of the new Mitchell Park Library and Community Center. 

Under the terms of the settlement, the City will recover approximately $700,000 from Flintco.  In addition, Flintco agreed to pay all of Big D's costs (the replacement contractor hired by the Surety) for completing the work (estimated to be over $2 million) and Flintco has agreed to drop all of its claims against the City. 

The City will release to Flintco $4 million of the contract balance that the City has been holding back since the takeover agreement between the Surety and the City went into effect last March.  The Surety subsequently hired Big D Pacific Builders to complete the project, and included in the total recovered by the City is approximately $150,000 in change order costs that will be waived. 

The City and Flintco agreed that the City will hold back $100,000 to allow that all final contractual work, particularly that related to LEED Platinum certification, is complete.  LEED Platinum is the highest rating possible to measure a building’s sustainability features. 

The comprehensive and final settlement is intended to cover any and all claims by both parties including liquidated damages, noncomforming work, change orders, and other excess costs. However, Flintco and the Surety will remain responsible for warranty/guaranty claims and  latent defect claims. 

"We wanted to resolve the legal issues associated with this project, and bring this chapter to a close," said City Manager James Keene.  “The new Mitchell Park Library and Community Center is the largest capital project built in Palo Alto in decades.  While it has been a long journey, in the end we have a beautiful new library and community center that came in under budget estimates, and judging from the overwhelmingly positive reaction from the community and the thousands who have come through its doors already, will be a community jewel that will bring together Palo Altans for many generations to come.”

In 2008, the community passed the Measure N bond measure that provided $76 million to fund major facility improvements to three libraries, including the Mitchell Park Library and Community Center. The City originally estimated the cost to construct the MPLCC at $50 million, but final costs for the project are now expected to be lower, in the range of $44 to $45 million.    

The settlement clarifies that the Surety and Flintco will indemnify the City against all potential claims brought by subcontractors on the project, and the Surety will provide a long-term warranty for the windows, as well as standard warranties for other items. 

Flintco and the Surety will be responsible to pay all subcontractor and supplier payments due and settle all subcontractor claims.  The City will also rescind the Notice of Termination it issued to Flintco, but the Surety and Flintco will remain responsible to honor the warranties and guarantees notwithstanding the rescission.