Pact Proposed for Resuming Beverly Hills Construction

Work on a new police headquarters and library for Beverly Hills, stalled since mid-January by a payment dispute, could resume as early as next month under an agreement being negotiated between the city and the project’s general contractor.

With the threats of lawsuits still looming, negotiators have proposed a plan that would give J. A. Jones Construction Co., the general contractor on the $50-million plus project, $2 million to pay off back claims from its subcontractors and get the project moving again.

The city also would pay $7 million to finish the project in stages, with 63 days allowed to finish the new police station, 84 days for the library and 196 days for the exterior. The clock begins ticking the day the agreement is signed.

The plan is to go before the City Council today, but City Atty. Greg Stepanicich said there was no guarantee that the pact would be ready for signing.

“We’re attempting to conclude the agreement,” he said Monday.

Jones claims that the city has not paid $10 million in bills for the last three months of work. The city counters that the contractor has been overpaid and that Jones is responsible for delaying the project--thus increasing the cost.

Under the proposed agreement, both sides retain the right to seek an arbitrator or go to court to resolve their differences, which include the city’s claim that it should pay no more than the $53 million it has already spent for the project, and Jones’ assertion that delays and cost overruns on the project are not its fault.

The city also would be free to seek the return of its $2 million payment to restart the work.

“The arguments center on to what extent these are reasonable costs,” Stepanicich said.

City Council members have said they were stunned by the billing dispute, which surfaced only weeks after the city raised $115 million, most of it earmarked for the construction project, by refinancing the debt on its entire Civic Center.

The money was supposed to cover the final stages of construction and provide several million dollars extra for other programs. But after weeks of closed-door meetings, it became clear that there would be little money left over.

The police station and library project is part of a larger effort that also includes renovation of the 58-year-old City Hall. That work is proceeding under a separate $11-million contract. An $11-million Fire Department headquarters and a $9-million parking structure already have been completed.

Some City Council members have blamed City Manager Edward S. Kreins, who oversaw the project from its inception, for not keeping them informed about the cost overruns and delays.

Movers had been hired to transfer city workers to their new offices in the police and library buildings when Jones pulled its workers off the job in mid-January. The city promptly fired the firm.

Kreins, 55, announced earlier this month that he would retire as of July 1 after 10 years as city manager, but he said his top priority until then will be completion of the Civic Center, which has been on the drawing board since 1982.

The final phase, including the police headquarters, the library and an outdoor courtyard, has gone through 78 change orders since the original contract was signed in 1986, and ballooned in price from $43.6 million to $53 million as of the end of last year.

The contractor argues that an extra $10 million worth of work was required by changes and delays caused by the discovery of asbestos in the old library building and ground water under the police parking lot, among other problems.

“We’re sure looking forward to getting the job back on track and finishing it up for the city,” said Jefferson Welsh, West Coast development manager for the North Carolina-based firm.