City of Kent seeks money for ShoWare Center ice plant problems

Kent city officials hope to recover as much as $500,000 from contractors or subcontractors because of problems with the ice plant equipment as well as hot water heaters at the city-owned ShoWare Center.

Ben Wolters, city economic and development director, told the City Council’s Operations Committee on Oct. 21 that the city has sent claim letters and will file lawsuits, if necessary, to cover the repair costs for “errors of omission and material defect.”

The council approved a $95,000 contract in May with Oregon-based PermaCold Engineering, Inc., to repair the equipment that forms ice on the arena floor after compressors failed. The information PermaCold found during the repairs aided the city as it pursues a claim to recover costs associated with the ice plant equipment.

Wolters said there has been several instances over the last couple of years where foreign material was found in the machinery of the ice plant. Two pumps also failed at the same time.

Mortenson Construction, based in Minneapolis with a Kirkland office, oversaw the building of the $84.5 million arena that opened in 2009.

“We provided a claim letter from the city to Mortenson Construction for the ice plant, hot water heaters and opened a conversation about the plaza lights which never worked properly,” Wolters said.

The plaza lights are the outside green runners along pathways that extend from the street to the arena.

“They are not costing us any money but it’s a case of we didn’t get what we paid for,” Wolters said about the lights.

Mortenson contacted Pace Industrial, of Canada, which was the contractor to design and build the ice plant. Mortenson sees an issue with, “errors of omissions and material defect,” Wolters said.

“These are key words in signaling that they believe the claim has legitimacy,” Wolters said.

Mortenson has invited the Pace president to come to town to talk to ShoWare and city officials about the issue. A date for that meeting has yet to be set.

“Mortenson’s hope initially just as ours is, is to come to some sort of negotiated settlement that would satisfy us and them in dealing with the claim,” Wolters said. “Barring that, however, the city has reserved all of our legal rights to pursue our claim.”

City Attorney Tom Brubaker further explained to the committee the city’s plans.

“The letter is an attempt to resolve at arm’s length in advance of filing the lawsuit,” Brubaker said. “It doesn’t cost us much to file a lawsuit but it does cost in outside attorney fees to analyze the case and prosecute the case. We’re hoping that we will get this resolved.

“I will caution you that these situations are complicated. There are a number of parties involved, designers, architects, project managers, contractors and subcontractors. There will be a lot of finger pointing. I feel like we are in a good position to make a strong claim but whether we get all of our concerns fully addressed and paid for I can’t predict at this time.”

The claim is for $500,000 with about $400,000 covering the ice plant costs.

If the city receives a settlement claim, it would go as current year revenue for the year paid, Wolters said, about cutting losses at the arena that has lost money each year since it opened. Those losses are expected to hit $3.2 million by the end of this year.

“Mortenson has been highly cooperative with us on the claim related to the ice plant,” Wolters said. “They have some legitimate questions about the other parts of our claim, about who is responsible, mainly the designer. But on the ice plant they believe that is their responsibility because that was built under a design built contract and the subcontractor Pace was directly responsible to them. At least verbally they have acknowledged that.”

City staff is working on another claim letter to LMN, a Seattle architect firm, to focus on the hot water tanks and the plaza lights because of the connection to their design responsibilities, Wolters said.