Suit May Hike John Wayne Terminal Cost

The price tag for the county’s 16-month-old terminal at John Wayne Airport, already bloated by cost overruns and delays, could jump by another $28 million if the chief contractor wins a new legal battle.

If so, that would bring the total public cost of the terminal project to nearly $90 million, more than twice the original amount set by the county.

County officials said Thursday that they have paid virtually all their bills to date and predicted victory in court.

But in a lawsuit filed in Orange County Superior Court, Taylor Woodrow California Construction Ltd. claims that county officials muddled the project through inept administration and endless design changes.

The company claims that the county owes it millions of dollars in unpaid work. And Taylor Woodrow is even seeking a $1.5-million good-performance bonus for its work in securing a September, 1990, opening for the terminal, even though it missed the original deadline by five months.

“Taylor Woodrow and its subcontractors, despite their best efforts, were unable to construct the project in a reasonable, logical, sequential and efficient manner and were forced to proceed in a piecemeal manner, under congested and accelerated conditions and in an uneconomical manner,” according to the lawsuit, which was filed in November.

The lawsuit marks another bump in the rocky relationship between Taylor Woodrow and the county, which reached a low point in May, 1990, when the company was fired from the airport expansion’s $25-million garage and roadway project. The project was eight months behind schedule at the time.

Taylor Woodrow, which retained its role as contractor for the terminal, has already filed a $7.2-million breach-of-contract suit over the firing.

In the latest legal maneuverings, county officials said they are confident they can show they don’t owe Taylor Woodrow the millions claimed, but said they were frustrated and angered by the most recent lawsuit nonetheless.

“My position is that the county owes Taylor Woodrow nothing, and, in fact, Taylor Woodrow owes the county an apology for their less than stellar performance,” Board of Supervisors Chairman Roger R. Stanton said.

“I’m really losing patience with Taylor Woodrow for costing the people of Orange County money with these baseless claims,” he said.

Supervisor Thomas F. Riley, after whom the new terminal is named, said: “It’s so sad that such a great building and a center of Orange County business has to have this difficulty. I’m just hoping we can get this squared away quickly.”

Taylor Woodrow officials said they, too, hope to settle the dispute quickly and avoid a protracted trial.

Company President Denis MacDaid called the lawsuit “a precautionary move to protect our rights under California law. . . . I hope that we can work out our differences with our client. That’s how we intend to proceed--through negotiations--to resolve our differences.”

A status conference on the lawsuit is set for Jan. 23 in Superior Court in Newport Beach. Attorneys said it is likely that the new suit will be consolidated with about 10 other lawsuits--totaling about $12 million--that have been filed by subcontractors against both Taylor Woodrow and the county.

Taylor Woodrow’s lawsuit over the terminal construction does not specify damages. But in supporting documents filed with the county in 18 thick volumes, the company maintains it is now owed about $28 million, according to Richard Oviedo, deputy county counsel assigned to the airport project.

County officials place the total value of the terminal project at $64.8 million. They say they have paid all of that amount already, with the exception of $3.9 million allowed under contract for reserve funds and delay-related damages against the contractor.

But Taylor Woodrow is seeking another $28 million in all.

That would bring the price tag for the terminal to just under $90 million--or $24 million more than the county’s current estimate, and more than double the $42 million that was originally estimated.

The dispute stems in large part from more than 850 design changes at the terminal, many of which were executed to save money.

Taylor Woodrow and the county find themselves thousands of dollars apart on the value of scores of those changes--everything from changes in carpet color to plastic lamination on corridor walls and the marble used at the base of the John Wayne statue that adorns the terminal’s lobby.

Taylor Woodrow’s lawsuit offers only broad, undetailed indictments of the handling of the terminal project, but it places the blame squarely on the county and several subcontractors also named.

Were it not for the county and the subcontractors, the lawsuit asserts, “Taylor Woodrow would not have incurred substantial delays, disruptions, changes, suspensions and acceleration of the work.”

But county officials said they are confident they will prevail.

“There’s very little merit to their claim, and the possibility that they’ll collect what they are seeking is extremely unlikely and infinitesimal,” said Oviedo said.

Regardless of the merits, however, the dispute will probably mean hundreds of hours of costly legal preparation. And Oviedo noted: “If these claims are not negotiated, we are looking at years of litigation.”

Airport’s Soaring Costs

The following is the history of the Thomas F. Riley Terminal at John Wayne Airport and how costs have risen over the years. February, 1985: The county adopts a master plan for an expanded John Wayne Airport, including a new terminal designed to increase passenger capacity from 4.75 million people to 8.4 million a year. May, 1986: $42 million: County officials estimate the cost of the new terminal. June, 1988: $59.7 million: After receiving no bids close to their amount, county officials decide to award the terminal contract to the low bidder, Taylor Woodrow California Construction Ltd. Construction begins. April, 1990: over $60 million: The terminal is scheduled to open. Because of cost overruns and scheduling snafus, it doesn’t. Estimated cost of the terminal rises. Sept. 16, 1990: $64.8 million: Amid pomp and ceremony, the new Thomas F. Riley Terminal is opened as part of a $310-million airport expansion. The county’s estimated cost of the terminal is now $4 million higher. Nov. 27, 1991: nearly $90 million: Taylor Woodrow sues the county, claiming in supporting documents that it is owed about $28 million for unpaid work. That would bring the total price for the terminal to more than twice the original estimate.