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RMA says Pelicano Drive takeover bids received; judge’s ruling on construction-default dispute expected after final briefs
Summary
Staff reported that the RMA’s declaratory-judgment action over a construction default is nearing resolution in bankruptcy court, that RMA and the surety have received bids to complete work, and that staff will review bids and negotiate a takeover agreement while awaiting the judge’s ruling.
Camino Real RMA staff told the board Jan. 29 that a bankruptcy-court process over the Pelicano Drive widening project is approaching a decision and that bids for an interim takeover to resume construction have been received and are under review.
‘‘We filed a declaratory judgment action against the trustee, asking for the judge to determine that the default we declared against JAR Construction was proper,’’ Executive Director Raymond Tayas said, describing the legal posture that has paused surety-funded restart of the project. Tayas said the matter has produced multiple hearings and that the RMA’s final brief was due the day of the meeting; the trustee will file a final brief two weeks later and the judge indicated he would be ready to rule shortly thereafter.
Tayas described an interim approach the authority and surety are pursuing while the court matter proceeds: the surety repackaged the remaining design plans, solicited bids for a completion contractor and has now shared those bids with the RMA for review. ‘‘They've received bids now ... we're reviewing those now, and the hope is that we'll be able to ... award to a completion contractor to utilize the remaining available funds in this interim phase while we wait for the judge's ruling,’’ Tayas said.
Board members asked whether the board would need to approve a takeover agreement. Staff said the ultimate contract would be between the surety and the contractor but that the RMA would need to execute a takeover agreement before the surety could enter the construction contract; the board would approve that takeover agreement.
Timing and next steps
Tayas said the RMA's brief was due the day of the meeting and the trustee's final brief is due in two weeks; the judge has broken the matter into discrete issues and indicated he should be able to rule after the final briefs. Staff said they would consult with counsel and notify the board when a ruling arrives or when they identify a bid that would be recommended for award under a takeover agreement. Board members asked staff to provide written updates since the board will not meet again until March unless a special meeting is called solely to consider a takeover agreement.
Why it matters
The outcome will determine whether the surety must advance funds to restart construction and whether the RMA may need to take additional contractual or legal steps to complete the Pelicano Drive widening. Resuming construction under a takeover agreement would use available project funds and the surety’s process to allow work to continue before the court issues a final ruling on the default.
Ending
Staff said they will notify board members as soon as they have a recommended bid or a court ruling; they also said they will convene a special meeting if a takeover agreement requires board approval before the next regular meeting.
