Los Angeles Times

Lawsuit alleges fraud at college

Contractor claims corruption besets L.A. Valley’s long-delayed theater project.

- By Teresa Watanabe

It’s billed as one of the most expansive theater and media arts spaces among community colleges in California. The sleek new center at Los Angeles Valley College will have four indoor theaters, an outdoor amphitheat­er, classrooms, a newsroom, a radio station and faculty offices across 103,000 square feet of glass, steel, concrete and wood.

The $82-million center will enrich the education of Valley students — who are largely low-income and the first in their families to attend college — with marketable skills for the region’s creative industries and provide intimate performing spaces for the diverse artistic community, according to Jennifer Read, chair of the college’s theater department.

But since its 2016 groundbrea­king, the project has been beset with troubles. It’s four years behind schedule. It has racked up $12 million in unanticipa­ted costs. After prolonged arguments over who is to blame, an independen­t arbitrator concluded in April that the Los Angeles Community College District was primarily at fault for the delays and violated state requiremen­ts for “good faith and fair dealing” in constructi­on contracts. The arbitrator ordered the district to pay $3.2 million in compensati­on to Pinner Constructi­on Inc. and its subcontrac­tors, according to the arbitratio­n report obtained by The Times.

In a lawsuit filed Tuesday in Los Angeles County Superior Court, Pinner and two subcontrac­tors have accused the L.A. district’s project team of fraud, corruption and racketeeri­ng for

conspiring to delay the theater’s constructi­on so consultant­s could garner more billable hours.

The complaint alleges that taxpayers shelled out $20 million in unjustifie­d payments and that Pinner and its subcontrac­tors were forced to spend more than $24.8 million for extra constructi­on costs, overhead, consultant and legal fees, and other expenses. In the lawsuit, Pinner is demanding that the district remove its consultant­s, including college project director Mark Strauss, senior vice president of DACM Project Management Inc.

“Acting in concert, RACKETEERS maliciousl­y conspired to delay the Project, blame it on PINNER and earn millions of additional dollars in the process,” the complaint alleges. “These consultant­s … must be brought to justice and held accountabl­e.”

Strauss declined to comment, referring questions to the L.A. district. The district declined to respond to questions about the lawsuit or arbitratio­n finding because, a spokesman said, officials were busy with a board meeting Tuesday.

Contacted outside the meeting, board President Gabriel Buelna said: “I trust our staff. People file lawsuits. We can’t comment on them.”

The district, which educates 220,000 students on nine campuses in the largest community college system in the nation, has long been embroiled in controvers­y over its massive constructi­on program. That program has been funded by four constructi­on bond measures totaling $9.5 billion approved by voters since 2001. The district’s Board of Trustees voted last month to place a $5.3-billion bond measure — its largest ever — on the November ballot.

In 2011, The Times documented financial waste, nepotism and mismanagem­ent in several district projects funded with bond measures. District Chancellor Francisco Rodriguez has said that reforms launched since then, including an independen­t bond monitor, have prevented mismanagem­ent from recurring.

But in 2019, Rodriguez fired the district’s chief facilities executive, David Salazar, after he raised red flags about cost overruns in the $3.3-billion constructi­on bond program that voters had approved in 2016.

In his performanc­e evaluation of Salazar, Rodriguez rated him highly in nine of 12 categories including accomplish­ments, job knowledge and problem solving, but said the executive’s leadership, communicat­ion and judgment fell short, resulting in “diminished confidence” in him among trustees and an overall evaluation of unsatisfac­tory. Salazar in turn filed a whistleblo­wer complaint, alleging retaliatio­n for outing problems in the program, but it was dismissed by the district’s bond monitor.

Three years later, L.A. Valley College is at the center of the lawsuit by the project’s constructi­on firm.

The project, called the Valley Academic & Cultural Center, will bring the theater arts and media arts department­s into a single complex. Among the college’s 18,000 students, only 35 to 40 are majoring in theater — onethird the number a decade ago — although more than 100 students in other discipline­s take performing arts classes, Read said.

Additional students are majoring in media arts, broadcasti­ng, journalism and photograph­y, but enrollment numbers were not immediatel­y available from college officials.

In past board discussion­s, previous trustees questioned the scope of the project for the relatively small performing and media arts programs. But Read said she hopes the new complex will attract more students and broadly serve the region’s artists by providing more intimate places to perform than the nearby 1700seat Soraya theater at Cal State Northridge.

“If you build it, they will come,” Read said, adding that she aspires to expand from the classic theatrical canon of Shakespear­e and Ibsen to build in more multicultu­ral programmin­g, including Chicano and Black theater classes.

The project, originally slated to open in 2018, has been substantia­lly delayed.

An illustrati­on of the project’s multiple problems lies inside the main 430-seat theater, a soaring space that rises 80 feet high. Behind its concrete and wood-paneled walls is an enormous structure of interwoven reinforcin­g steel so heavy and tall that Pinner’s team had to build a massive wooden frame around it to hold it up, Newt Kellam, the firm’s chief administra­tive officer said in an interview.

Pinner wanted to use shorter pieces of reinforcin­g steel no taller than 20 feet — which the arbitrator agreed was standard industry practice. But the district’s project managers barred that plan and forced the firm to use pieces nearly three times higher and build the supporting structure for it.

The consultant­s insisted on the unusual design despite warnings from Pinner that it would delay the project for about 13 months and increase costs by $16 million, Kellam said. The firm’s lawsuit alleges that the consultant­s deliberate­ly misled district trustees and officials about the issue of splicing, or joining of vertical steel, and that disagreeme­nts over it resulted in a 15month delay and $2.5 million in additional compensati­on paid to consultant­s.

“It’s so overbuilt, it’s like a bomb shelter,” said Robert Boyington, Pinner’s project executive, during a recent tour of the site.

Deborah S. Ballati of JAMS, a private arbitratio­n firm chosen by Pinner and the district to settle their difference­s, found multiple management failures by college consultant­s.

She said the district’s team insisted that the state architect had to greenlight the splicing requested by Pinner but failed to seek approval even though the estimated costs and time to do so were not excessive.

The consultant­s’ response to Pinner’s requests for informatio­n about various design issues — more than 2,700, well above the industry norm for a project of this size — were “often late and incomplete, further exacerbati­ng the design issues,” Ballati found. She rejected the district’s arguments that the contract documents clearly barred splicing, saying Pinner was right to assume otherwise in developing its project timeline and budget.

In another constructi­on dispute, the district’s consultant­s are ordering Pinner to tear down exterior panels, which were installed in 2018 on part of the building amid more than 40 inspection­s by various state and district officials, said Dirk Griffin, Pinner’s chief executive officer.

The lawsuit alleges that the district’s team is ordering Pinner to rework the job and instead install the panels in a way that is different from instructio­ns by the manufactur­er, Trespa — which would void the warranty for them — and from how the panels have been installed on other L.A. Valley campus buildings in the past.

The problems with the exterior panels, audiovisua­l equipment and door hardware that have surfaced since September could delay the project an additional 200 days and result in more than $1 million in additional compensati­on to the consultant­s, the lawsuit alleges.

 ?? Jason Armond Los Angeles Times ?? PINNER CONSTRUCTI­ON officials inspect the project at Los Angeles Valley College in June. Pinner and two subcontrac­tors allege that taxpayers have shelled out $20 million in unjustifie­d payments for the center.
Jason Armond Los Angeles Times PINNER CONSTRUCTI­ON officials inspect the project at Los Angeles Valley College in June. Pinner and two subcontrac­tors allege that taxpayers have shelled out $20 million in unjustifie­d payments for the center.

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