Justice center cost rises; contractor quits

March 27, 2002 |

The contractor building the justice center complex near Temecula has quit in a dispute over rising costs, which topped $ 100 million with county supervisors' approval Tuesday of an extra $4.8 million.

The supervisors took steps Tuesday toward hiring Turner Construction to finish building the Southwest Justice Center, a 330,000-square-foot facility intended to serve one of the fastest growing sections of the county.

The center combines 12 courtrooms, a jail and a juvenile hall. It now will cost an estimated $ 102.2 million. The jail and juvenile hall are completed and open. The courtrooms are expected to open in January, county spokesman Raymond Smith said.

The Nello Group, the Santa Ana-based company managing the project, gave 30 days' notice last month and quit this week, Smith said. In a letter to county officials dated Feb. 25, Nello's executives accuse the county of interfering with their ability to keep the price at their guaranteed $ 97.4 million.

The county "has caused irreparable damage to both Nello and to the overall integrity of the project," the letter states. Interference claimed

The letter lists 32 charges and specific incidents of interference. They range from the county's alleged failure to listen to Nello's warning that the project's budget was too small, to the county's citing of construction flaws that turned out to be "red herrings."

Nello outlined nine specific instances in which the county's project supervisor, Dan Searle, tried to "undermine" the company's work and went beyond the scope of his duties. Nello said Searle, for instance, allowed the Sheriff's Department to influence construction to "meet their ever changing requirements." That practice resulted in excessive expenses to Nello, the company said.

Searle declined to comment and referred questions to Smith, who said he could not respond to specific allegations.

"Overall, we just deny the allegation of interference by the county was the problem of this project," Smith said. "It was Nello's job to bring in the contract at a guaranteed maximum price. They were unable to do that, and they're gone." Hired two years ago

The county hired Nello two years ago on the promise that it would finish the project for $ 97.4 million or less. The guarantee came after the original $ 50 million price tag climbed to $ 81.4 million and then to nearly $ 100 million for more courtrooms, an expanded jail and a juvenile hall.

An audit in 2000 into the project cited serious deficiencies in the way the county and Nello handled the project. Auditors said the county selected a designer-builder before defining the scope of the work and didn't verify how the price was determined. It also said administrative fees paid to Nello appeared to be high.

Two months after the audit Dan Waldo, the county's building services manager, resigned.

Supervisor John Tavaglione cast the only vote Tuesday against the motion. He said it was based on principle. He called for the audit and also voted against the $ 97.4 million plan two years ago.

"We're so far along that to stop it now would be foolish," he said, "but we should have stopped it long ago." Suit urged

Supervisor Bob Buster said the scope of the project could have been planned better from the outset, but he also said that Nello should be sued for the extra costs that the county is incurring.

"I think we need to go after them tooth and nail," he said.

Buster said Nello never complained to the board before it decided to quit.

"Why didn't you scream and yell and say we can't run this project and we're being interfered with," Buster said. "No. They collected their pay until" the project was nearly done.

Smith said the $ 4.8 million cost overrun stems from hundreds of mostly small changes, such as repositioning electrical outlets and door locations. At one point, a subcontractor installing wiring for speakers and security systems had to be fired and a new one hired, Smith said.

"That cost several hundred thousand dollars," Smith said.

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