Concrete firm: Payment for 422 property grab inadequate
Feds currently suing same company for fraud in rail project
WEST POTTSGROVE » The Stowe concrete company being sued by the federal and Virginia governments for allegedly ripping them off on a major transportation project is itself in a legal fight with the Pennsylvania state government for allegedly ripping off the firm on a major transportation project.
The owners of Universal Concrete at 400 Old Reading Pike are contesting the amount of money the Pennsylvania Department of Transportation paid for more than 40 acres it took through eminent domain in order to straighten out Route 422 and build a new Stowe interchange, according to court filings obtained by Digital First Media.
The $35.6 million Route 422 project is expected to be ongoing into late 2020.
As part of that re-alignment, PennDOT is straightening the curve on Route 422 west of the bridge over the Schuylkill River between West Pottsgrove and North Coventry.
To do that, and build the new interchange, required condemning about 40 acres of land at the Universal Concrete site.
The total property at 400 Old Reading Pike — once a DoehlerJarvis metals plant — is 76.5 acres and the property on the west side of the original Route 422 is 7.39 acres, according to the filings.
The condemnation was authorized in 2011 and initiated in November 2013 and the property taken “contains improvements and structures belonging” to the property owner’s “industrial manufacturing facility,” according to the legal papers.
In December 2013, PennDOT cut a check for $1,637,092 as compensation, an amount the property owner, 400 Old Reading Pike Inc., “did not accept.”
Instead the property owners filed for a special board to be convened and review the taking and the amount.
That board convened on May 10 and issued its report on June 20, and increased the amount to $1,860,000.
Still unsatisfied, the property owners filed an appeal of that decision on July 26.
According to the legal papers filed by the Hatfield law firm of McNelly/Goldstein, the value of the property before the eminent domain taking was $3.7 million, according to a separate appraisal submitted as evidence in support of this claim.
The board’s conclusion and award “is inadequate and does not represent just compensation for the partial taking of the property as of the date of condemnation,” according to appeal, and the property owners have demanded “a jury trial.”
A call to McNelly-Goldstein seeking comment was not returned before press time Thursday.
The eminent domain challenge won’t be the only reason the owners of Universal Concrete will be in front a judge in the foreseeable future.
Last month, the U.S. and Virginia governments filed a joint fraud lawsuit against Universal Concrete regarding what they say is falsified data concerning concrete panels made for new stations on the $5.8 billion expansion of the Metro line in Washington, D.C. to Dulles airport. Further, the metro-line lawsuit comes in the wake of a 2016 whistleblower lawsuit by a former employee who claimed he was told to falsify data on whether the concrete met specifications for the Washington, D.C. project.
“The (federal/Virginia) suit seeks unspecified damages and civil penalties from the defendants: Universal Concrete; its president, Donald Faust Jr.; and its former quality-control manager, Andrew Nolan, who is Faust’s nephew,” according to a report in The Washington Post.
The rail project at the center of the federal suit is a 23-mile extension of the Metrorail system’s silver line that will extend in two phases to Dulles airport.
Phase one opened in 2014 and phase two is under construction now.
About 1,500 panels manufactured by Universal Concrete Products are part of six stations in the project, provided as part of a contract worth $6.1 million for the Stowe company.
But more than a year ago, the Metropolitan Washington Airports Authority, which is overseeing the project, and Capital Rail Constructors, the lead contractor, identified problems with Universal’s manufacturing process, according to a May 22 article in The Washington Post.
Initially, officials thought the problems affected about 20 percent of the more than 1,500 panels. “In addition, 60 panels were found to be faulty because not enough concrete was covering the internal wire mesh,” the Post reported.
But a 2016 whistleblower lawsuit alleges that “all — not just a portion — of the panels could be flawed because the raw materials used to make them did not meet project standards,” according to the newspaper.