County settles Gateway project suit

March 01, 2001|By RUDY YNIGUEZ, Staff Writer

Described as the best news heard in a long time, the county Board of Supervisors voted unanimously to accept a $2.8 million settlement offer from the defunct infrastructure contractor on the Gateway of the Americas project.

The action was taken in closed session Wednesday.

Gateway area landowner John Pierre Menvielle said the settlement is excellent news.

"It's the best thing I've heard in a long time," he said. "It'll really help the Gateway project move forward."

Menvielle said his family credits the efforts made by County Executive Officer Ann Capela and County Counsel Ralph Córdova Jr. for pursuing the issue and reaching settlement.

Supervisors Chairman Tony Tirado said with the problems that have been faced the settlement surely will be a way for the project to move forward.


"It brings in some money to move ahead," he said.

After the contractor, Tower Construction Co. of El Centro, defaulted on the work, the county pursued Tower's insurance company, North American Insurance Co. of Oklahoma, through litigation to force NAICO to honor surety bonds posted on behalf of Tower. Tower was paid to construct water treatment, sewer, storm drain and surface improvements at the project.

Tower was awarded the contract in May 1999, reportedly fell behind on the work by December 1999 and was sent a letter of default by the county in February 2000.

The project broke ground in July 1999.

NAICO general counsel Pat Gilmore said he was unfamiliar with the details of the settlement.

"I do know that National American has made a settlement proposal to Imperial County on what's called an infrastructure project," he said Wednesday. "I think it was 2.8 (million dollars)."

Gilmore said the settlement would become official pending verification of the action taken by the Board of Supervisors.

Gateway area landowner Eric Rice said the news is good but terms of the settlement have not been released.

"It's not over until you get the money," he said.

County Counsel Córdova said the terms of the agreement are the county gets the $2.8 million and NAICO is released from any further obligations as surety company.

"This is a final settlement," Córdova said, adding NAICO had the option of completing the infrastructure work, having another company complete it or paying to have the work completed as intended.

Córdova said the county is in possession of a faxed copy of a signed settlement offer from NAICO and that an original document should be obtained by today or Friday.

"Upon receipt it will be executed by the supervisors chairman," he said. "The payment must be made within 30 days."

How the money will be spent is still unknown, according to a county press release.

"County staff will be meeting in the next few days to prepare a recommendation to the (Board of Supervisors) regarding the best use of the available funds to meet a variety of needs at the Gateway," the press release states.

Meanwhile, work is nearing completion on the project's water treatment and sewer plants.

Gateway area landowner Thomas Nassif, a principal with Los Alamos Land Co. LP, could not be reached for comment. Los Alamos includes the Maggio family, which also owns project property.

Staff Writer Rudy Yniguez can be reached at 337-3440.

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