Contractor sues River Valley Transit

It was a festive red ribbon-cutting occasion last April when the 350-space Church Street Transportation Project opened amid hoopla as dignitaries expressed hope for a parking solution in an expanding city needing parking and a terminal for Susquehanna Trailways.

The mood has changed, however, as last week the city learned it was was being sued by the Dillsburg contractor, Lobar Inc., that built the facility. Lobar claims it’s owned more than $538,000 in final payment related issues for work done at 11 Church St.

“A good faith dispute exists between the parties regarding the company’s failure to complete the project in a timely fashion,” said William E. Nichols Jr., general manager of River Valley Transit. “We will hold the obligation of this or any contractor to the specific details of the contract.”

The lawsuit claims the city has failed to fulfill the terms of the contract and change orders. With agreed-to change orders, the contract amounted to $3.2 million and the city has paid $2.9 million.

Lobar contends it did additional work that required hiring a subcontractor for $260,980 to attach artwork panels to the exterior of building.

Nichols said the city lost an unspecified amount of revenue from not having the parking deck operating.

He blames Lobar, which, he said, allegedly failed to complete the project by June 10, 2011, as specified in the contract and the city disputes the artwork claim.

“The city lost parking revenue because it couldn’t allow the garage open to the general public, only to hotel guests, because there was no elevator working and the city hired security to make sure those using the garage were safe,” Nichols said.

Lobar contends the June deadline was for substantial completion, but the contract did not contain a date for final completion.

Asked what the city may be out in the case, Nichols said the final payment could range from nothing to $500,000 depending on how successful River Valley Transit will be in assessing damages and other penalties.

Any leftover funds will be used in the upcoming Trade and Transit II project, which starts with the demolition of the 200-space Mid-Town deck, 144 W. Third St., Nichols said.

“We presume it will go to mediation first,” Nichols said.

City Council and Mayor Gabriel J. Campana were briefed in a memorandum about the lawsuit.

“If that fails to provide a settlement it will be up to a judge to determine what a fair settlement would be,” Nichols said.

No city dollars are being used in the defense of the lawsuit, Nichols said.

“We’re using state and federal grant funds that have been reserved for the final payment,” he said.