City secures ruling against contractor

Dave Brooks

City officials have secured a $2.4-million judgment against a

contractor who abandoned a city recreation project after taking off

with nearly $1 million in taxpayer funds.

In a July 29 hearing, arbitrator David B. Moon ordered Joseph

O’Connor to repay the advances he received to build a recreation

facility at the city’s sports complex, pay off the debt the city

incurred and make up nearly 2 1/2 years of lost revenue.

It remains unclear whether the city will ever be able to recover

any money from O’Connor, who is in the throes of bankruptcy. In an

e-mail to Assistant City Atty. Scott Field, O’Connor described his

dire financial situation.

“Since I have personally suffered serious financial reversals due

to this, including losing all ownership rights to my home and had my

car repossessed,” he wrote in a July 26 e-mail, “I now essentially

have zero assets and have limped along trying to reorganize in a way

where we could be financially responsible. With great difficulty and

much soul searching, I have had to move forward with a Chapter 7

bankruptcy for myself and my wife.”

In the same letter, O’Connor described a possible settlement

scenario to repay the taxpayer money, estimating that he could repay

the city within two to three years. Under the proposal, O’Connor

would continue to offer consulting services to various municipalities

looking to build recreation facilities. If the city would act as a

reference, he wrote, O’Connor would be willing to repay the city over

time with a substantial portion of his consulting fees.

The deal would also require the city to settle its lawsuit --

O’Connor said that the pending lawsuit against him makes it difficult

to find new work.

City Atty. Jennifer McGrath said she was skeptical about any type

of settlement offer from O’Connor.

“I’m not saying that we aren’t willing to look at getting the

taxpayer’s money back,” she said. “I’m just not very comfortable that

it is a viable option. It doesn’t seem to me like something he can

do.”

When city officials hired O’Connor in 2003 to build and operate

batting cages, roller hockey rinks and soccer fields, they had no

idea of his abysmal performance record. O’Connor was the lead

contractor behind failed sports complexes in two Pacific Northwestern

cities and was successfully sued by a Kalamazoo soccer-club owner for

abandoning a similar project. That club’s owner, Chris Keegan, even

petitioned an Oregon judge for an arrest warrant for O’Connor when he

failed to show up for court.

The city’s lawsuit reveals more details about the events leading

up to the current lawsuit against O’Connor. According to a trial

brief filed by Field, O’Connor left 90% of the work unfinished.

O’Connor moved the construction start date several times,

eventually settling for Oct. 7, 2003 -- about two months after he was

originally set to begin. O’Connor was supposed to have the facilities

completed by March 20, 2004, but by January 2004, he had written city

staff several letters, indicating that he was applying city cash

disbursements to other projects, arguing that he was suffering a

“funding crush” in his attempt to complete the sports complex.

Then on March 3, 2004, he wrote another letter to city personnel,

asking for the release of the final disbursement of $110,000 -- money that was supposed to only be allocated upon the project’s completion

-- as well as another $105,000 in contingency money. The city

refused.

O’Connor contends that the he could have saved the project if

given the remaining money. The city has since hired a new contractor

to complete a portion of the batting cages.

“I think it’s a good first step, but I’m skeptical if we’ll get

any of the money back,” City Councilman Keith Bohr said of the

lawsuit. “I’ll remain hopeful, but I think its now important that we

move forward with a majority of the improvements.”

QUESTION

How important is it for the city to recoup money it lost during

construction of the sports complex? Leave your thoughts on our

Readers Hotline at (714) 966-4664, fax us at (714) 966-4667, or e-mail us at o7hbindependent@latimes.comf7. Please include your

name and city where you live.

* DAVE BROOKS covers City Hall. He can be reached at (714)

966-4609 or by e-mail at o7dave.brooks@latimes.cof7o7mf7.