Long Beach, CA
File #: 13-003OB    Version: 1 Name: 010713-OB-Reso Setlmnt Agrmnt. w Grt American Ins.
Type: OB-Resolution Status: Adopted
File created: 12/27/2012 In control: Oversight Board of the Successor Agency to the Redevelopment Agency of the City of Long Beach
On agenda: 1/7/2013 Final action: 1/7/2013
Title: Recommendation to adopt resolution approving the decision of the City of Long Beach, as the Successor Agency to the Redevelopment Agency of the City of Long Beach to approve and authorize City Manager to execute a Settlement Agreement with Great American Insurance Company and/or Armand Gonzales, Inc., dba Gonzales Construction; and 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.
Attachments: 1. 010713item3ob.pdf, 2. O.B. 02-2013.pdf
Related files: 12-029SA, 10-027R, 13-0583
TITLE
Recommendation to adopt resolution approving the decision of the City of Long Beach, as the Successor Agency to the Redevelopment Agency of the City of Long Beach to approve and authorize City Manager to execute a Settlement Agreement with Great American Insurance Company and/or Armand Gonzales, Inc., dba Gonzales Construction; and

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.

DISCUSSION
On March 15, 2010, the City of Long Beach, 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. 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 sent a letter to Gonzales declaring them . in default of the terms of the contract and demanding corrective action. Finally, in a letter dated November 8, 2012, the Successor Agency terminated its contract with Gonzales.

In an attempt to ...

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