TITLE
Recommendation to approve and authorize City Manager to execute a Settlement Agreement with Great American Insurance Company and/or Armand Gonzales, Inc., dba Gonzales Construction;
Approve and authorize City Manager to execute a Takeover Agreement with Great American Insurance Company, to complete construction of Fire Station 12 and Emergency Resource Center; and
Increase appropriations in the General Fund - Redevelopment Agency “Sweep” Proceeds - (GP) in the Department of Development Services (DV) in the amount of $500,000. (District 9)
DISCUSSION
On March 15, 2010, the City of Long Beach (City), through its former Redevelopment Agency, entered into a contract with Armand Gonzales, Inc., dba Gonzales Construction (Gonzales), for the construction of Fire Station 12 and Emergency Resource Center (Project) located at 1199 East Artesia Boulevard. The approved contract is for $6,498,345. The former Redevelopment Agency also approved a 25 percent contingency to cover additional work.
On November 15, 2011, the City declared Gonzales in default of the contract and made demand upon Great American Insurance Company (Surety), the bonding company for Gonzales, to perform and complete the Project. Subsequently, on November 22, 2011, Gonzales filed a claim against the former Redevelopment Agency, which was denied by the City in a written response on January 10, 2012.
Following a series of meetings between the City, Surety, and Gonzales, and in an attempt to complete the Project in a timely and cost-effective manner, the parties agreed to allow Gonzales to continue work on the Project. However, on June 14, 2012, Gonzales filed a lawsuit against the Successor Agency, alleging breach of contract among various other causes of action. Subsequently, on October 4, 2012, the City of Long Beach, as Successor to the Redevelopment Agency of the City of Long Beach, sent a letter to Gonzales declaring it in default of the terms of the contract and demanding corrective ac...
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