BUFFALO, N.Y. (WIVB) - New York State is negotiating a settlement with the insurance company in the disputed Canalside construction project.
DiPizio Construction, the local company fired from the job, has gone to court to stop the settlement deal. In court filings, DiPizio claims that the cash settlement will hurt its claims against the state.
A state spokesperson confirmed Friday that negotiations with Travelers to settle the case are "in process" and "ongoing." No time table was given on when they may be concluded.
The payout would have to be approved by the Erie Canal Harbor Development Corporation board, the spokesperson said.
WIVB is awaiting word from state officials on whether the settlement payment to Travelers would be on top of the cost of the project.
The state is reportedly willing to pay Travelers nearly three million in cash plus remove other liabilities since the project was not completed on time. Under DiPizio's contract with the state, each day the project went beyond its deadline would cost $5,000.
The court papers filed by DiPizio will be aired in court next Friday before State Supreme Court Justice Timothy J. Walker who will decide on whether to grant DiPizio a temporary restraining order to stop the Empire State Development Corporation from entering into an agreement with Travelers Insurance.
In July, Walker had declined to stop the state from firing DiPizio, stating that the state had the right to dismiss the contractor and DiPizio could still recover financial damages. DiPizio has returned to Walker asking him to reconsider since a settlement would block DiPizio "from seeking any relief" against the state.
Travelers issued the bond to insure DiPizio as the general contractor on the Canalside project which is being built on part of the site of the former Memorial Auditorium. Once DiPizio was fired in May, Travelers had to pick up responsibility for completing the project.
The project, described as a centerpiece of the harbor development, calls for recreating historic canals filled with water in summer and frozen for ice skating in winter, towpaths and pedestrian bridges. The project's original deadline was November, 2012 but that was pushed back after Albany was delayed in clearing the funding.
Travelers selected Pike Construction Company of Rochester. Pike has a trailer on the site and workers have begun to do preparation work.
DiPizio claims it was made a scapegoat for delays caused by agency employees and that the family-owned company has suffered a loss of business and damage to its reputation.
The firm filed other lawsuits on Sept. 13 claiming that the firing hurt its business and reputation, that the firing was null because the ECHDC board did not vote on it and that the Liro Group, the project manager conspired with the state agency to blame DiPizio for the project delays.
The state claims that DiPizio failed to meet numerous project deadlines. It's May 8 termination letter cited DiPizio's "deficient work" and failure "to demonstrate any significant improvement in its performance..."
DiPizio won the bid at about $19 million which was under the $25 million project estimate. Canalside officials said they expect the project cost to remain within the original bid.
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