CSSM Fires Troubled Contractor; Delay in Opening Campus Likely

Louetto Construction has been fired from its work on the Cal State San Marcos campus, a company official said Wednesday, just one day after the city of Escondido took the firm off a park project for failure to pay subcontractors and material suppliers.

“We expect to receive termination on the Cal State San Marcos project tomorrow,” said John Tiersma, project manager for Louetto, Wednesday.

Louetto’s termination increases the chances that the opening of the campus will be delayed. University officials had previously said that, if work did not resume by the end of October the new campus, scheduled to be open by August, 1992, might open a semester late. And, according to workers on the campus project, it will take two more weeks to resume work, on top of the time it takes to hire a new contractor,

Work on the first phase of Cal State San Marcos site, a $9 million project, is scheduled to be completed by Sept. 12, 1991. University officials worry that a delay in the first phase will in turn slow following work. Construction on the first phase stopped in September after Louetto missed two payments totaling $1.3 million to the grading subcontractor, C.W. Poss.

On Tuesday, the city of Escondido fired Louetto from the $1.4 million Mountain View Park project. Fifteen subcontractors and suppliers on the project filed “stop-notices,” indicating that Louetto had not paid them, said Dale Mathre, the city’s park and open space superintendent.

The Escondido and Cal State San Marcos projects represent the second and third times in less than a month that the Escondido-based construction company has been fired by a public agency in North County.

Three weeks ago, the North County Transit District ordered Louetto off a $6.7-million renovation of the Oceanside bus maintenance yard for purportedly improper installation of underground fuel tanks.

Robin Hartnett, project manager for C.W. Poss, confirmed that Louetto has been taken off the San Marcos project. Louetto’s bonding company, Reliance Surety, has informed C.W. Poss that it will not be working with Louetto on the project, Hartnett said.

“They have basically told us that they are not going to have Louetto finish the project,” she said Wednesday. “We’ve been told that (Reliance is) talking to other contractors this week.”

Hartnett said that, once a new contractor is found, it will take at least two weeks to resume work.

“We’ve already taken all our equipment off the site and left the project,” Hartnett said.

University officials and spokesmen for the bonding company could not be reached for comment.

Escondido officials had given Louetto until last Friday to come up with a plan to pay subcontractors and suppliers the $270,000 that was owed on a park project, said Mathre, the city’s park superintendent.

“We had given them a deadline of Friday to provide a plan to clear the stop notices, and we did not receive a response and therefore proceeded with cancellation,” Mathre said.

The park, which began in January and originally was to be constructed by the end of July, is about 95% complete, Mathre said, and the city has asked the subcontractors to complete the project without Louetto.

Louetto is now negotiating with the California State University system to continue work on the site of Cal State San Marcos. Grading of the site came to a halt earlier this month because a subcontractor claims Louetto owes it $1.4 million for work done on the project.

The 11-acre Mountain View Park in Escondido, at the corner of Glenn Ridge Road and Citrus Avenue, would be the fifth community park in the city and have two ball fields, tennis courts, a playground and open turf areas, Mathre said.

“We’re authorizing the subcontractors that were already on the job to complete the work,” Mathre said.

The most important of the unfinished tasks at the park is the seeding of the ball fields, Mathre said.

“This is a park that we’re wanting to use in the spring for the Little League program, and if we want turf in the spring, we need to get seeds on the ground as quickly as possible,” said Mathre, who hopes the project will be completed within a few weeks.

Tiersma, Louetto’s project manager, acknowledged that the firm has missed payments to the subcontractors on the project.

“We’ve been around for 38 years, and the past few years have just been tough,” Tiersma said. “It’s partly due to the economy, and who knows what else.”

Anthony Fox, co-owner of Acme Iron Works, was one of the subcontractors that filed a stop-notice against Louetto. Fox said he recently reached a settlement with Louetto on payment for two other jobs and work on Mountain View Park.

“I’ve been doing business with this guy for 33 years, and it’s only recently that he’s gotten into trouble,” Fox said. “(Louetto’s) reputation now is worse than a used-car salesman’s.”

Ray Brody, president of Creative Lighting in San Diego, is still owed $10,000 by Louetto for work on the Escondido project, and he is skeptical that Louetto will be able to recover from its financial problems.

“He has debts everywhere right now,” Brody said of Lou Pauletto, owner of Louetto Construction. “I don’t think that anybody at this point that has any sense wants to walk into that fire.”