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Spokane Valley council approves $11.75 million settlement with Meridian for City Hall construction defects
Summary
After an executive session, Spokane Valley City Council unanimously approved a settlement resolving the city’s claims against Meridian Construction and other parties over construction defects at City Hall. City staff said the settlement and prior recoveries total roughly the original project cost.
Mayor Haley and the Spokane Valley City Council unanimously approved a settlement resolving claims that Meridian Construction and related contractors were responsible for defective construction at City Hall.
City Manager John Holman told the council the problem emerged soon after construction finished about eight years ago, when cracks and settlement were discovered along a radius wall. "The contractor did not compact about 14 feet worth of soil just for that little area," Holman said, describing an investigation that produced thousands of pages of reports and multiple technical addenda.
Holman said the city filed suit in 2020. The recent mediation produced a total settlement of $13,935,000, he said, with Meridian responsible for $11,750,000, Architects West for $1,650,000, 831 Consulting for $475,000 and All West Testing for $60,000. Holman said the construction cost for the project in 2016–17 was about $10 million and that the city’s initial budget including land and design was approximately $14 million; the city has spent about $6 million out of pocket in remediation and investigations.
"We came in and tear apart piece by piece portions of this building, document all that, and put those addendums together that were then used in the court case," Holman said, describing the scope of the forensic work the city commissioned. He thanked outside counsel Scott Sleight and Nick Korst of ACS and local contractors Garco Construction and Clancy Welch for work on repairs.
City Attorney Kelly Concrete and staff also briefed the council earlier in the process. Council members praised staff and the legal team for the lengthy effort to resolve the matter. Council Member Padden said, "It's been a long haul. You did a fantastic job." Council Member Merkle said he would withhold detailed comment until the settlement documents are fully executed.
Deputy Mayor Hettenberg moved the settlement approval; a second was recorded. After public comment and a brief opportunity for council questions, the motion passed unanimously.
The council voted in open session after an executive session on litigation. The settlement agreement will be executed consistent with the motion approved by the council.
Holman recommended a change in delivery method for future vertical construction projects, advising an alternate delivery or design–build approach when possible to reduce risk on large public projects.
The council's approval completes several years of investigation, litigation filings and mediation; Holman said the city had previously reached other settlements with subcontractors and testing firms that contributed to the overall recovery.
