There is a national debate about whether or not sports stadiums should be publicly funded (they shouldn’t), but for now it looks like the price of stadium construction will continue to fall on taxpayers. When these construction projects are undertaken by the public, bonds must be issued to insure the project. Mechanics liens are a lot like baseball, and bond claims are a lot like mechanics liens, so a bond on a baseball stadium just might be a grand slam.
Recently, the city of Hartford has struggled with construction of a Double-A Baseball Stadium for its Hartford Yard Goats. After months of delays and nearly $10M in change costs, the Yard Goats will likely miss their entire home schedule for the season. Here’s what happened.
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The contractor fell behind.
In July of 2014, the city of Hartford called for design proposals for a new stadium for the Hartford Yard Goats, a Double-A baseball team moving to Hartford from New Britain. The deadline for entering proposals came about one month after the request for proposals. The project was on an incredibly short timeline, and informational meetings regarding the proposals took place a mere two weeks after the proposal request. After receiving only two viable bids, the city contracted Centerplan Construction for the construction of the $56M stadium. As a public project exceeding $100,000, the contractor was required to post a performance bond under the Miller Act.
Ground broke on the project in February of 2015 with a projected completion date of April 7, 2016, less than a year and half later. This may have been the only part of the project that was actually on schedule. Over the next year, despite reassurances, Counterplan fell months behind schedule. According to Centerplan, this due in large part to frequent design changes by the city. $10M over budget, Centerplan blamed increasing costs on the project were incurred due frequent design changes and rising prices for steel and cement. According to their CEO Robert Landino, “You can’t ask us to build a house for a certain amount of money when we don’t control the design of the house.” Nevertheless, Centerplan faced steep penalties for delaying the project, as any delay would certainly affect the Yard Goats’ season.
The April finish date came and went. Centerplan set a new finish date of May 31, thus postponing opening day at the park nearly a month. In late May, the mayor of Hartford notified Centerplan’s surety, Arch Insurance Co., that the city would be calling the $47.1M bond on the project. With days left before the new opening date, an inspection of the project found nonfunctioning hot water pipes, uninspected elevators, and a faulty scoreboard along with 300 other unfinished items. Centerplan claimed it needed 60 more days to finish the project. Shortly thereafter, Centerplan was fired.
So what happens next?
Well now that the surety is involved, you can bet this project will be finished before Arch Insurance Co. has to pay the amount on the bond. Bond claims yield results, and Arch Insurance Co. will find someone to finish the project as quickly as possible to minimize its payout to the city of Hartford.
If you’re curious about how bond claims work or about the difference between performance and payment bonds, head over to our Bond Claims FAQ and select your state.
