School District Sues Developers Over Belmont

The Los Angeles Unified School District filed a civil lawsuit Tuesday, charging developers of the abandoned Belmont Learning Complex with submitting millions of dollars in excessive billings and failing to complete work the district paid them for.

The lawsuit names the project’s developer, Temple Beaudry Partners, as well as two major construction firms that formed the development partnership--Los Angeles-based Turner Construction and a U.S. subsidiary of the Japanese construction giant Kajima International.

Also named in the lawsuit is Belmont’s architect, McLarand, Vasquez & Partners, which the district accuses of design errors and a failure to ensure that the downtown site had been adequately assessed for environmental hazards.

Joseph Cotchett, an outside attorney who filed the case for the district, said he could not specify the amount of alleged excessive billings because district accountants are still examining project records.

However, Cotchett said he believes the amount will exceed the $2-million figure cited by district Inspector General Don Mullinax in his December report probing Belmont’s finances.

“Our belief it that it’s much more,” he said.

Cotchett said he submitted a copy of the lawsuit Tuesday to Atty. Gen. Bill Lockyer, a move that would precipitate a state investigation into the alleged loss of taxpayer money.

The Los Angeles County district attorney’s office is still reviewing allegations of excessive billings. However, the district attorney’s office declined to file criminal charges after examining an earlier report by Mullinax that blamed nine district employees and several contractors for their roles in the Belmont fiasco.

The school board aborted the $200-million project in midstream early this year after environmental experts warned that underground methane could result in an explosion.

A spokesman for Temple Beaudry Partners declined comment Tuesday for comment on the lawsuit. The spokesman said the development partners in April filed a demand for the district to enter binding arbitration to settle its contract disputes with the developer. The partners contend the district owes them $20 million. Howard Miller, the district’s chief operating officer, said the legal action Tuesday is part of the Board of Education’s goal of “recovering all taxpayer money that was lost as part of building Belmont.” The district previously sued their Belmont lawyers, O’Melveny & Myers, in a case that is still pending.

The lawsuit filed Tuesday alleges that the contractors--and 14 subcontractors also named in the court action--were able to engage in “a pattern of overbilling and incompetence during the design and construction” of Belmont because of bad advice the district received from O’Melveny & Myers.

According to the lawsuit, O’Melveny & Myers attorney David Cartwright told the district that terms of the contract he drafted provided “less reason for the district to perform an intensive review of the invoice documentation...”

In reviewing payment applications since January, 1999, the lawsuit said, the district has discovered “substantial overbilling and excessive payments . . . as well as incomplete and defective work . . . represented as complete.”

In its suit against O’Melveny & Myers, the city’s largest law firm, the district alleges that it received faulty legal advice that allowed the project to begin in 1997 without adequate environmental assessments.

Later investigations have shown pervasive seepage of methane and small quantities of toxic hydrogen sulfide in the ground below the school site which is on a former oil field west of downtown.

Several environmental experts have said the campus could be made safe by placing plastic membranes under buildings and some open areas. Estimates for the repairs have ranged from $10 million to $60 million.

The board voted in January to cancel the project, on which approximately $175 million has so far been spent.