Aspen, contractor at odds over Burlingame
ASPEN ” The city of Aspen is withholding more than $1 million in payment to Shaw Builders for unresolved issues relating to the construction of the Burlingame Ranch affordable housing project.
Until city officials consider phase one of the project complete, Shaw won’t get another dime even if it leads to litigation, which both sides are attempting to avoid.
“We’ve not accepted the workmanship as complete,” said Steve Bossart, the city’s asset project manager who has overseen the Burlingame project since construction began on the existing 84 multifamily units. The project was scheduled to be completed in June 2007.
Notice letters have been sent to Shaw informing the contractor that the city demands defective work be corrected and considers it a “failure to achieve substantial completion.”
“They’ve done a great job in some areas and not in some areas; it’s been very frustrating,” Bossart said, adding about $35.5 million has been paid to Shaw but the final payments have been halted. “They’ve been sitting on $1.2 million, you’d think they’d want to finish.”
Clark Atkinson, executive vice president of Shaw, said the construction company very much wants to resolve outstanding issues with the city. But he said what officials are asking for is beyond what was agreed to in the contract. He added that all work done by Shaw has met the city’s codes.
“We’re here to be responsible and meet our obligations,” Atkinson said. “They are making a mountain out of a molehill. It’s a great community out there, and it’s frustrating that people are making a big deal over small issues.
“It’s a lot of money for us … for what we’ve been through and what we’ve done.”
Caught in the middle are Burlingame homeowners, who city officials are hoping will agree to allow another 64 units to be built on the site, located across from Buttermilk off Highway 82. The majority of city voters in 2005 authorized 236 units to be built. But in last November’s election, the majority of the electorate agreed to as many as 300. Ultimately, it’s up to the homeowner’s association whether it’s 236 or 300.
Phases two and three have yet to be built, but elected officials said they plan to ask voters this May to pass a bond to pay for Burlingame’s completion.
However, the homeowner’s association has no intention of voting on higher density at Burlingame until the outstanding issues are resolved, which could take months to hash out.
As the developer of Burlingame Ranch, the city of Aspen has been under intense scrutiny by the public in the past several months regarding whether it’s capable of effectively managing such a large capital project.
The latest wranglings with Shaw are a result of city officials’ efforts to ensure that Burlingame residents and the government are protected.
But Atkinson said those efforts may be overzealous.
“It seems to me that we are caught in political crossfire,” he said.
At issue is what Bossart considers 2 to 5 percent of the entire project that’s not complete, which includes problems with roofs, fire alarms, solar hot water systems, irrigation and landscaping.
Atkinson estimates it’s about $50,000 worth of work but said he considers it a fairness issue in terms of what the city is trying to hold Shaw responsible for.
One example is metal roofs on some of the buildings. Atkinson said at the city’s request, Shaw mounted a photovoltaic solar panel system on an existing roof. The penetration of the surface caused leaks.
Atkinson contends that the roof was never designed for that kind of solar system. Shaw suggested the metal be replaced with a different material.
“We proposed a way to correct it but the city rejected it,” he said. “We’ve taken the position that it’s not our fault.”
But Bossart said when the subcontractor repaired the leaks on the roof, which were damaged from snow and ice, government officials questioned the work ” based on the advice of a consultant the city hired.
“The contractor has told us they have corrected it but we’re not satisfied,” Bossart said, adding Shaw is arguing that the maintenance requirement in the contract says the contractor is not responsible for damages if there is a foot or more of snow on the roof.
“We don’t want the homeowner’s association to have to deal with these things, and to put that burden on anyone is absurd,” Bossart said. “We expect a designer and builder that can design a building that works in this climate.”
That matter won’t be resolved until the spring, when the roof can be fully inspected. If Shaw doesn’t address it, the city will pay to correct it and withhold payment from the contractor, Bossart said.
Also outstanding are the fire alarm and solar hot water systems, which Bossart said are inadequate based on inspections conducted by outside consultants.
Panel sensitivity and false signals have been found in the fire alarm system, and a leak was recently discovered in the hot water system, which damaged a unit.
Failures in those systems have raised concerns in terms of their functionality and installation, Bossart said.
Atkinson said Shaw responded within 24 hours when both systems malfunctioned and corrective action was taken. In the case of the fire alarm system, it passed inspection by Aspen Fire Marshall Ed Van Walraven and met all safety codes.
“To the best of our knowledge, those systems were installed to all applicable codes,” he said, adding the problem was that the homeowner’s association wasn’t properly instructed by city officials on how to test the system, which is required for it to function normally.
Atkinson said the homeowners of the unit damaged by an improper fitting on a piece of pipe connected to the hot water system were put up in a “nice” hotel by Shaw and the problem was corrected immediately.
“The city hired consultants to find problems and now the city says the whole system must be messed up,” he said.
Landscaping, irrigation and site drainage are other outstanding issues that city officials don’t consider complete.
Atkinson said out of acres of land that have been seeded, there are two patches of grass that have been worn out by kids playing in those areas. He said he doesn’t think Shaw should be held responsible for wear and tear.
“We can’t allow people to demand things that aren’t fair or equitable,” he said.
In the end, Shaw will likely pay to resolve whatever issues the homeowners and the city have, Atkinson said, noting that the company lost money on constructing phase one of Burlingame. He said he hopes to secure a contract for phases two and three.
“We will have some resolution,” he said. “This is really heartfelt ” we want to make our customers happy, and our reputation depends on doing what we said we we’re going to do. We owe the city and it’s our moral obligation.
“But it’s frustrating that people are constantly ragging the project,” he added. “We really did do a good job.”
Bossart said Shaw is working diligently to meet its contractual obligations.
“We believe they will complete the work,” he said.
In the meantime, the city has set aside $1 million in case it must hire other companies to complete phase one of Burlingame to the satisfaction of the homeowners and elected officials.
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