Transbay Authority hit with $150 million lawsuit

SAN FRANCISCO >> The general contractor for the $2.2 billion Salesforce Transit Center is suing the agency overseeing the project, claiming it failed to pay for delays and cost overruns that arose from mismanagement.

The contractor, Webcor-Obayashi, filed the lawsuit seeking $150 million in damages Tuesday in San Francisco Superior Court. The 129-page complaint is at least the second in an expected “avalanche of lawsuits” that will be forthcoming from numerous subcontractors, said Sam Singer, a spokesman for the construction management company.

The Transbay Joint Powers Authority (TJPA), the agency overseeing the project, issued a statement Wednesday denying the allegations. The transit center, which was supposed to serve nearly a dozen bus agencies along with eventual Caltrain and highspeed rail service, was initially scheduled to open in October 2017, but delays pushed that date back to August of this year. Then, just six weeks after it opened, the authority abruptly closed the center after workers discovered large cracks in two structural steel beams. There is no estimate for when it will reopen.

The lawsuit alleges the authority mismanaged the project, noting its board of directors fired the executive director, Maria Ayerdi-Kaplan, over concerns about major cost overruns and repeated delays. San Francisco’s Department of Public Works then took over the project and provided better management, but Singer said, “The damage was already done.”

“Essentially, the TJPA seeks to pass its responsibility on from its own delays onto to Webcor,” Singer said. “That’s just not right.”

Joint venture WebcorObayashi had to file some 12,000 requests for information, a formal inquiry that seeks clarification on construction documents, because the documents furnished were flawed or incomplete, the lawsuit alleges. In some cases, it took the TJPA up to 296 days to respond, according to the suit. As a result, the contractor had to submit more than 1,600 change order requests to correct those errors or omissions, which took an average of 129 days to resolve and “directly impacted the critical path of the project and caused significant delays,” the lawsuit states.

But, the authority says Webcor-Obayashi was responsible for those delays and had a contractual commitment to deliver the project.

“While we are still reviewing the details of the complaint, at first glance, many of the accusations that deal with delays to the project pre-date Webcor’s repeated commitments to deliver the transit center on time,” Mohammed Nuru, chairman of the authority’s board of directors, said in a statement.

The authority is already facing another lawsuit filed in May from Skanska USA, which was responsible for overseeing the procurement of steel in the transit center and which alleges similar complaints. The two suits are just the first of “many more to come,” Singer said.

Meanwhile, the center remains closed while crews work to find a permanent fix for the two cracked steel beams. It installed a temporary shoring system and on Monday reopened Fremont Street, which had been closed to traffic due to safety concerns. The lawsuit is not related to the cracked steel beams, Singer said.

Nuru said the authority remains focused on reopening the center “as soon as safely possible.”

“We hope that all parties will join us in that effort,” he said.