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Staff recommends settlement to release retainage and close 32 N. Potomac project; council signals support
Summary
After delays and construction problems at 32 North Potomac Street, staff proposed accepting Boulevard Contractors' settlement: release enough retainage ($243,000 held) to pay subcontractors while Boulevard forgoes the rest and the city waives liquidated damages, avoiding arbitration and added legal fees. Council members expressed agreement.
Staff detailed problems encountered on the renovation of 32 North Potomac Street, including unanticipated groundwater at elevator pits, weak foundation conditions, staffing shortages by the contractor and workmanship concerns. The original contract was about $2.2 million and change orders increased it to roughly $2.4 million; the city is holding about $243,000 in retainage.
Staff said a large portion of that retainage is owed to subcontractors and described a settlement Boulevard proposed: release enough retainage to pay those subcontractors while Boulevard would forgo the remainder and the city would not pursue liquidated damages. "The city right now is holding about 243,000 in retainage on the project... a good bit of that money is owed to Boulevard subcontractors," staff said, and recommended accepting the agreement to get subcontractors paid and close out the project rather than incur arbitration costs. Council members voiced agreement but asked clarifying questions about potential arbitration and legal exposure; staff noted arbitration would add legal fees and there is no guarantee of recovery.
