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Council orders $108,000 in liquidated damages, releases $273,648.65 retainage for downtown revitalization contractor amid dispute
Summary
After receiving a presentation from MC Squared—s counsel about potential extended-cost claims, the council voted to proceed with $108,000 in liquidated damages against MC Squared and to release the contractor—s final retainage of $273,648.65, subject to a complete release of liens.
Lake Jackson City Council on Jan. 23 directed staff to assess liquidated damages of $108,000 against MC Squared and to release the contractor—s final retainage payment of $273,648.65 for work on the downtown revitalization phase 3 project.
The decision followed a presentation by MC Squared—s attorney, Adam Robertson of Andrews Myers, who urged the council not to assess liquidated damages and warned that a firm assessment could prompt litigation. Robertson told the council that MC Squared contends it is owed extended general-condition costs resulting from owner- and staff-caused delays, late responses to RFIs, scheduling limitations and weather days. He said the contractor believed extended costs could total hundreds of thousands of dollars if the city did not acknowledge a full equitable adjustment.
Council members and a small review committee had met with staff and reviewed the project file before the meeting. Staff recommended the council proceed with liquidated damages of $108,000 based on project records and the committee—s review; the committee recommended retaining that amount. Councilwoman Muncette moved to proceed with liquidated damages and to release the final retainage, and the motion passed on council voice vote. Council included a caveat that the release be accompanied by a complete release of liens.
City staff said the action does not preclude MC Squared from pursuing contract claims through litigation; Robertson told the council that a lawsuit would be the next step if the city did not negotiate an agreed settlement. Council discussion weighed the city—s interest in closing out the project and getting final documentation against the contractor—s claim for extended costs.
Ending: The council—s action releases the final retainage following the posting of a complete release of liens and imposes liquidated damages of $108,000; staff said they will complete final closeout documentation and continue to work through any remaining contract documentation and claims processes.
