The Cambridge Housing Authority and the construction company that redeveloped its historic Putnam School in East Cambridge are in a high-stakes legal battle, with each side saying the other is responsible for more than a year’s delay in finishing the project. The authority says the contractor, B.C. Construction of North Reading, mismanaged the project and owes the authority almost $2 million in damages stemming from the delay. B.C. Construction has sued the authority for $1.4 million in unpaid bills and says it’s owed another $2 million in costs from the delay, faulting the authority, city departments involved with the project and Eversource for the holdups.
The legal hostilities have remained under the surface as the authority publicized white-walled modern apartments, glass-topped new stoves and soaring views from the four-story building atop a hill at 86 Otis St. with virtual video tours and music. The Putnam School building has 24 apartments for low-income elderly tenants and nine units to house 10 disabled people, room for one additional disabled tenant compared with before the renovation. Another change: Before the rehabilitation, disabled tenants lived in three apartments with each unit housing three people.
Authority executive director Michael Johnston declined to discuss the dispute because it’s in court, though he did say it didn’t affect tenants’ ability to move back into the modernized development. “Putnam School is 100 percent occupied, so the suit has no impact and there’s no outstanding work on the project,” Johnston said in an email Monday. Attorneys for B.C. Construction didn’t respond to voicemail messages.
The contractor filed suit against the authority July 3 in Middlesex Superior Court. The same day, the company asked for a preliminary injunction ordering the authority to pay the entire $1.4 million claim within five days, asserting that the authority’s refusal to pay requisitions for completed work has resulted in “threats to the very existence of B.C. Construction’s business.” The company’s motion for an injunction said the authority’s action opened the door to “significant disputes” with subcontractors and there is “a significant threat of bankruptcy,” the filing said.
In response, the authority said the harms B.C. Construction invoked were speculative and the company wasn’t likely to win its suit. A hearing on the preliminary injunction request was scheduled for July 18 but was canceled because the courtroom where it was to be heard was shut down for unexplained reasons. As of Tuesday the hearing had not been rescheduled.
Authority argues
The authority signed a contract with B.C. Construction on Oct. 7, 2021, for $12.1 million to redevelop the 1890 schoolhouse, which had not been modernized since the authority acquired it in 1983. The work included installing an HVAC system and elevator, updating apartments with new appliances and transforming the shared apartments for nine disabled tenants into eight one-bedroom units and one two-bedroom apartment.
The contractor was supposed to reach “substantial completion” by Feb. 10, 2023. Instead, it reached that goal on March 13 this year – 397 days late. The original $12.1 million had swelled to at least $13.6 million as of last September. According to B.C. Construction, there were more than 300 change orders and approved changes amounted to $1.8 million in additional costs.
The two sides began dueling in May by mail. The authority fired the first shot, warning B.C. Construction it would stop paying requisitions because the delay had cost the authority almost $2 million in extra charges and it planned to retain that amount. Authority chief financial officer John Filip said in an affidavit filed in the case that the additional costs included lost rental income, increased “carrying costs” for the debt financing the project and anticipated lost income to support the project.
B.C. Construction had fallen behind almost from the start, the authority said. It didn’t assign enough workers and supervisors to the job, failed to provide accurate schedule estimates and didn’t tell the authority of “unforeseen” conditions it was now complaining of, the authority said.
The contractor’s side
The contractor fired back with some specifics. Right from the beginning, the city building department “rejected plans” for the project until it received “required paperwork” from the U.S. Department of Housing and Urban Development, so a “notice to proceed” didn’t come until Dec. 15, more than two months after the contract was signed. Deciding how to design and install a sprinkler system took more than a year because of “disagreement between the different city entities,” B.C. Construction said in its response to the authority. The authority “took almost two years to approve the change order for new ceilings,” after first insisting the existing ones didn’t have to be replaced. Eversource caused “months of additional delay” because of “lack of cooperation” in deciding how to get power into the building, the contractor said. None of this was the company’s fault, it said.
Despite the tone of the letters from each side, each party ended with offers to talk and try to resolve their dispute. Not without disclaimers, though.
“Nothing herein, including CHA’s request for additional information, shall be deemed a waiver of CHA’s rights or remedies under the contract or otherwise, all such rights being expressly reserved,” the authority’s letter ended.
“B.C. Construction reserves all rights and looks forward to resolving this dispute,” the contractor concluded.
A stronger
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