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HomeMy WebLinkAboutR-81-019711 RESOLUTION NO. s i 7 A RESOLUTION AUTHORIZING THE CITY ATTORNEY TO ENGAGE THE SERVICES OF THE. LA14 FIRM OF STEEL, HECTOR & DAVIS AS SPECIAL COUNSEL REGARDING CLAIMS AGAINST THI: CITY ARISING FROM THE CONSTRUCTION OF THE CITY OF MIAMI/UNIVERSITY OF MIAMI JAMES L. KNIGHT INTER- NATIONAL CENTER AND AUTHORIZING PAYMENT FOR THESE SERVICES IN THE AMOUNT OF $25,000 ON A RETAINER BASIS; FURTHER AUTHORIZING AN AMOUNT NOT TO EXCEED $10,000 AS E.XPENDiTURES FOR THE SERVICES OF NECESSARY EXPERT [JITNESSES AND CONSULTANTS; FUTHER AUTHORIZING PAYMENT FOR THE AFORESAID SERVICES FROM FUNDS ALLO- CATED FOR AD,iINISTRATIVE 1•:XPF.NSES OF SAID CENTER CONSTRUCTION; FURTHER PROVIDING THAT NO 1,11ONIES IN EXCESS OF THE HEREIN AUTHORIZED SUMS BE EXPENDED FOR SUCH SERVICES UNLESS EXPRESSLY AUTHORIZED BY THE CITY COMMISSION. WHEREAS, Frank J. Rooney, Inc., the City's general contractor for the construction of the City of Miami/University of Miami James L. Knight International Center has placed the City on notice as to possible litigation concerning the completion date of the said Center; and ld111:REAS, Florida Steel Corporation, as the subcontractor for Frank .1. Roonev, Inc., furnishing and erecting the structural steel, has also placed the City on such notice; and 1�H1:Itl:A5, the compiexities of this project require the City to have expert advice in the field of contract litigation to best serve: the interests of the City of Miami; NOW, THEREFORE, BE IT RESOLVED BY THE COMMISSION OI' THE CITY OF MIAMI , FLORI DA: Section 1. The City Attorney is hereby authorized to employ the law firm of Steel, Hector & Davis as special counsel on a retainer basis With $25,000 hereby authorized as compensation for said law firm's service and also hereby authorizing an amount not to exceed $10,000 as expenditures for the services of expert wit- nesses and consultants deemed reasonably necessary by said special counsel in resolving said legal claims in connection with legal Claims against the. City arising from the construction of the City of Miami/University of Miami lames I.. Knight International Center, with the above payment hereby authorized to be made from funds clllucated for administrative expenses of the said Center's con- "GCF"ENT INDEX s t r �i t i oil CU ^ CITY COMMISSION ITLf,rI MEETING OF '1 r� -• V E SGLunUN NU .......... ..........' Y 1 S e?imkgKS:. ......................... FOLLOW -_- f" f Section 2. No monies in excess of the above authorized sums are to be expended for such services unless expressly authorized by the Cite Commission. PASSED AND ADOPTED this 17 _ clay of MARCH , 1981. MAURICE A. FERRE_ M A Y O R ATTEST: RAL IV G. 0 N G I E CITY CLERK APPROVED AS TO FORM AND CORRECTNESS: 0" Zt, t I - - ROSERT F. CLARK ACTING CITY ATTORNEY _2- "SUPPORTIVE DOCU MI ENTS FOLL0W" --- -R97 CITY OF 1-11AMi. INTER -OFFICE ; _.)QIoA ME%1URAr4LUM -., Honorable Members of the March 12, 1981 'ILE City Commission City of Miami/University of Mian -/ C James L. Knight Center International FR'.. Robert F. Clark "`"`' '' '' Employment of Special Counsel Assistant City Attorney ' (2) The City's general contractor for the construction of the City of Miami/University of Miami James L. Knight Interna- tional Center has notified the City of its intention to institute litigation concerning the completion date of the Center due to numerous change orders which have affected the construction schedule. Other facets of this litigation concern the assignment to the general contractor of the City's contact with the structural steel suppliers for the Center. Due to the intricate financing structure of this project and the City Manager's perception of the need to engage counsel possessing expertise in the field of contract lit- gation, we have confirmed our willingness to engage the firm of Steel, Hector & Davis to act as such special counsel. Mr. Grimm's attached memo of March S, 1981 treats the problem facing the City in greater detail and supports our recom- mendation for the City Commission to adopt the attached resolution. RFC/rr cc: Richard L. Fosmoen City Manager "SU I PORTIVE D0C/U Mi EIV I S FOLLOW S - 1 q 7 To FROM L A CITY OF MIAMI. LOZIOA INf'ER•OFFICE, �!dEMORANDIJM c 4 Richard L. Fosmoen City Manager -�14 1 / � 312 ent E. / s's�ant! Manager DATE March 5, 1981 TILE 5,8,_L• Conference/Convention Center Additional Funding REFEPENCES ENCLOSURES The magnitude -of the Convention Center project becomes more appar- ent every week. We are faced at the present time with two major problems. In essense, these problems are time and money. The time problem is critical because in all likelihood we will no+ - be able to complete the Convention Center by February 1, 1982. The money problem is going to require additional funds to supple- ment what has already been provided by the Bond Issue. It is im- portant to keep in mind that the project was bid in mid 1979; however, construction did not really get seriously under way until after August 1980 when the bonds were sold. Delay was one reason for the increase in cost. The omissions, additions and changes in the architectural plans since they were originally bid up to this date were the major causes for the increase in cost. Before the Revenue Bond Issue was sold, the City had committed a little over $17.7 million dollars for the project. At the time of the bond sale we had spent a little over $15.3 million dollars of that total. During the process of developing costs to complete the project for the bond sale, it was determined that the City would have to supplement the Bond Issue by a little over $3,500,000. The balance from the $17.7 million dollars was used for part of this deficit. The additional funding came from other City sources and amounted to a little over a million dollars. It must be kept in mind that the $60 million dollars from the Revenue Bond Issue was not all available for construction. In fact, a good portion (almost $20 million dollars) had -to go into reserve and bond service accounts, cost of issuance and insurance premiums. Our money problem can be summarized as follows. Out of the total amount of funds available to the City, we had remaining after the bond sale slightly over $51 million dollars to complete the proj- ect. Contracts that we have awarded from this amount total al- most $46 million dollars, $15 million of which is for the Garage. That leaves an approximate balance of $5 million dollars to com- plete the project. Listed below are items that are required in order to complete the project and their dollar magnitude. "SUPPORTIVE DOCIiNi ENTS FOLLOW" or Richard L. Fosmoen -2- March .5, 1981 Budget allowance for furniture and fixtures $2 million Special Convention Hall equipment, including seats, stage, rigging, curtains and dividers, etc. $1.3 million Reserve for pre -opening expenses, consulting fees, legal fees and administration $2.5 million $5.8 million As you can see these items alone exceed the funds available by $800,000. In•addition, we have requests for change orders right now in the amount of $2.7 million dollars, which we will have no choice but to pay. Basest on the history of changes, I do not feel comfortable that we can go through the next year of construction without other changes. I strongly suggest that at least $500,000 be provided for items which have not been anticipated. I also sug- gest that an allowance of $500,000 be provided for overtime in the event it is necessary. In summary, this would require that the City allocate for the Con- vention Center $4.5 million dollars to complete the funding for the project to include all of the above items. $ 800,000 Required for items listed above 2,700,000 Changes since award 500,000 Possible additional changes 500,000 Possible overtime premium 4,500,000 Of the $4.5 million dollars, the amount of $2.7 million for changes is necessary right now. Ile do have time before the remaining $1.8 million dollars is provided. It is set forth here to alert the Com- mission of the possible extent of the money problem and give the Commission the option of providing all of the funds needed or just the essential portion at this time. The problem of time is complex. I stated earlier that the project probably would not be completed on February 1, 1982. I cannot at this time state when the project will be complete. The key to the problem of completion really evolves around the permanent loan. If Massachusetts Mutual, the permanent lender for the Hotel, doesn't withdraw its commitment for the mortgage of the Hotel for failure to complete on a date certain, then there would be no potential lia- bility to the City or to any other party involved in this project. The Developer has stated that it is bility to the City, nor to anyone, complete on or before May 1, 1982. plete" is unfortunately subject to his opinion there will be no lia- if the project is substantially The wording "substantially com- a great deal of interpretation. "SUPPORTN D0CU ENT FOLLOW ,.; , 1) 7 or Richard L. Fosmoen -3- March 5, 1981 The Construction Manager has had prepared and submitted to the Con- tractor a schedule which indicates that the project can be completed before the end of March, 1982, even though a major element of the project (the steel erection) has been delayed. Unfortunately, the Contractor does not accept this schedule. The'Contractor's contention is that he needs a year to complete his work once the steel erection is complete. Even this statement tends to oversimplify the problem of the steel erection because a portion of the steel erection cannot take place until the Contractor relocates certain utilities and com- pletes the foundation for the connection to the Garage. This area of work is presently the main access to the site. This relatively small portion of the project is so surrounded by "ifs" that it makes an exact completion difficult to determine. The solution to the problem of time would take on a different ap- proadY if the liabilities for failure to complete on time were re- moved. Therein lies the dilemma. More efforts are being made to protect against potential liabilities than, unfortunately, are be- ing made to get the project complete. Almost all the problems regarding the structural elements of the job have now been resolved. The Architects, the Construction Manag- er and the City Project Director are working very hard to resolve the anticipated problems of the mechanical, electrical and finish of the project. It must be assumed from past experience that some of the same problems we have experienced with putting the structural elements together will also happen with putting the remaining por- tions of the project together. Not all of the solutions will require additional money or time, but enough of them will to give the Contractor a reason from his point of view for further extensions of time and a deepening of our di- lemma. At this time we have no specific guaranteed solution for time. I feel it is important that the Developer bring the permanent lender in so that the magnitude of this problem can be openly dis- cussed and a solution reached. Without the participation of the permanent lender, it is my opinion that the City's efforts with the Contractor will not eliminate the concerns of liability. cc: R. Clark, Acting City Atty. A. Poms, Project Director A. Werner, MCAI. D. Cather, Dir., Public Works D. Rosenberg, Esq. "SU �PORTIVE DOC(. "A N TS FOLLOW" Tr y or ir WILLIAM C. STE£L LOUIS J. HECTOR OAPREY A. DAVIS ELWYN L.MIOCLETON WILLIAM B. KILLIAN EPNEST J. HEWETT, P A. JOHN M. FARRELL JERRY B. CPOCKETT, P A. WILSON SMITH, PA. TALBOT OALEMBEPTE.P.A. JAMES H, SWEENY, M.P. A. J0HN EDWARO SMITH M. DAVID FAUST NORMAN A.COLL THOS E.CAPPS,P.A. S-EPARD KING,PA. MATTHEW M.CHILOS,P.A• BARR♦-,DAVIDSON NOEL H.NATION,PA. BRUCE S.PUSSELL ALVIN B.OAVIS JOSEPH P. KLOC11,JP. RICHARD C.SMITH THOMAS R.-eGU1GAN,P. A. DENNIS A.LARUSSA,P.A. OENNIS P,COYLE,P.A. STEEL HECTOR & DAVIS SOUTHEAST FIRST NATIONAL BANK BUILDING MIAMI. FLORIDA 33131 PAr RICIA A SETT: PAUL .:. SONAVIA ROBERT J. iPVIN DONALD M. MIDOLEBROOKS MIME S BUCKNEP ARTHUR G.WPOSLE JUDITH M,KORCHIN JOHN M.SARKETT JEFFREY I.MULLENS VANCE E.SALTEP W. PETER BURNS GERRY S.GIBSON SMAPYL L. POULSON RICHARD LAMPEN JOSE I,A_ IGARRAGA THOMAS M AT K Ov JEFFREY SEPCOW FRANK P.SCRUGGS,II W.GLENN DEMPSEY THOMAS P.'. OLSCY BARBARA A, ILVEOMAN JONN T, BUt ER BRIAN R.BRATTESO SHERRY A.STANLEY WILLIAM L.COUPSHON TELEPHONE (305) 577-2800 TELEX 51.5758 C.POBERT BURNS WILL M. PRESTON WILLIAM ;FCOUNSEL March 10, 1981 Mr. Richard L. Fosmoen City Manager Mr. Vincent E. Grimm, Jr. Assistant City Manager City Hall 3500 Pan American Drive Miami, Florida 33133 Gentlemen: PALM BEACH OFFICE STEEL HECTOR DAVIS BURNS & MIDDLETON 205 WORTH AVENUE P.O. BOX 2637 PALM BEACH, FLORIOA 33460 TELEPHONE 13051 655.5311 Re: City of Miami Convention Center In response to the inquiry made at the recent con- ference, this firm is in a position to accept employment as special counsel to represent the City in connection with the Convention Center project upon the terms and conditions presented herein. It is understood that this firm will serve as special counsel, in cooperation with the City Attorney's office, with full responsibility for supervision and coordination of all legal services in respect to the subject project. The legal services to be rendered on behalf of the City include all services necessarily and reasonably required for the proper protection of the interests of the City in respect to such project, including but not limited to con- sultation with City officials, legal advice and counselling, and representation of the City in litigation ensuing from the subject project. The undersigned will serve as lead counsel with responsibility for supervision of the legal services and providing for the availability of services by other members of the firm as needed by the City, in full cooperation and coordination with the City Managerg4 f--k= City Attorney. SOPPORTIVc, FOLLOW" STEEL HECTOR & DAVIS Mr. Richard L. Fosmoen Mr. Vincent E. Grimm, Jr. March 10 , 1981 Page Three reasonably necessary to assist in the resolution of matters of controversy arising in connection with the subject project, pursuant to consultation and recommendation of special counsel. A copy of this letter agreement is also submitted to the City Attorney's office for review. Respectfully submitted, STEEL HECTOR & DAVIS By : - n • Darrey A. Davis P DAD/m cc: Robert F. Clark, Esquire Acting City Attorney Accepted and approved this day of March, 1981. THE CITY OF MIAMI By: Richard L. Fosmoen City Manager "SUPPORTIVE D0CU1tif1LNTS FOLLOW 9 STEEL HECTOR & DAVIS 0 Mr. Richard L. Fosmoen Mr. Vincent E. Grimm, Jr. March 10, 1981 Page Two It is understood and agreed that the City's employ- ment of this firm as special counsel in this matter, and this firm's acceptance of employment, is on the basis of a retainer in the sum of Twenty -Five Thousand Dollars ($25,000.00), and the continuing basis of reasonable attorney's fees; that is, special counsel shall be entitled to receive payment of fair and reasonable compensation for all legal services performed for and on behalf of the City in connection with the subject project. The determination of reasonable attorney's fees involves consideration of the followinq factors and guides: (1) benefits resulting to the City from the services rendered, (2) the novelty, difficulty, and importance of the questions involved, (3) the skill employed by counsel in conducting the cause, (4) the amount of money involved, (5) the responsibility incurred and fulfilled by counsel, (6) the counsel's time and labor reasonably required to adequately represent the City, and the other factors generally given consideration in determining fair and reasonable compensation for legal services, including in this instance the constant availability of counsel to adequately meet the needs of the City for services. At such time as the services rendered exceed the full amount of the retainer, this firm shall be entitled to submit for payment by the City monthly statements for such additional services, which statements will be submitted for review by the City Attorney's office. It is further understood and agreed that the City shall reimburse special counsel for costs and expenses necessarily and reasonably advanced and expended by special counsel in connection with the subject project, including court costs, witness fees, service of process, expenses of depositions, court reporters' fees, telephone charges, photocopy expenses, travel expenses, and the like. Special counsel shall submit to the City monthly statements for the reimbursements of such costs and expenses, which shall be promptly paid by the City. It shall be the responsibility of the City to contract and pay for the services of expert witnesses and consultants Jl ttCly)f1`:1'1f1T' t, -� FOLLOW pI 0, WILLIAM C. STEEL LOUIS J. «ECTOR OARRCv A OAVI$ ELWTN L,MIODLETON WILLIAM B .ILLIAN ERNEST J. «EWETT, P A. JOHN M. FAPRELL JERPT B. CROCKETT, P A, WILSON SMIT« PA, TALBOT D'ALEMBERTE,P,A JAMES H. SWEENT,LII,P A. JOHN COWARD SMITH H. DAVID FAUST NORMAN A.COLL THOS E.CAPPS,PA, SHEPARD ICING,PA. MATTMEW M,CHIL05.P.A. SAPPT R,CAVIOSCN NOEL M, NATION, P. A, BRUCE S. RUSSELL ALVIN B. DAVIS DOSE P« P. ALOCK,JR. RIC«ADO C.$MITH T«OMAS R.MCGUIGAN,P.A DEN NIS A,L♦RUSSA,..A. 0CN N.S P. _-•LE,P. A. STEEL HECTOR & DAVIS SOUTHEAST FIRST NATIONAL BANK BUILDING MIAM1, FLORIDA 33131 PATPIC!A A.SEIT: TELEPHONE 1305) 577-2000 PAUL J. BONAVIA ROBERT -, PV,N TELEX 51.5750 C. ROBERT BupNS DONALO M. MIOOLEBROOKS WILL M. ppES70N MIKE 5. BUCKNER ART«UR G. WROBLE WILLIAM E.SAOOWSKI .IUDI*« M, .a PC«IN March 10, 1981 OF COUNSCL JO«N M, BAR.ETT JEFFRET I MULLEINS-- VANCE E.SALTER PALM BEACH OFFICE w. PETER BURNS OLRR. S. GIBSCN STEEL HECTOR DAVIS BURNS 6 MIDDLETON S«ARTL L.POULSON 20S WORTH AVENUE RICHARD J. LAMPEN P.O. BOX 2631 JOSE I. ASTIGAPRAGA THOMAS J.MATKOV PALM BEACH,FLORIDA 33460 JEFFPE. BERCOw TELEPHONE (3051 655-5311 FPAN. .. SCRUGGS,= W,GLENN OEMPSET T«O-AS R, WOOLSET BARBARA A, SILVERMAN JOHN T, BUTLEP BRIAN P. BPATTE00 S«ERPT A.STANLET h ILLIAM L.COLOSHON Mr. Richard L. Fosmoen City Manager City Hall 3500 Pan American Drive Miami, Florida 33133 Re: City of Miami Convention Center Dear Mr. Fosmoen: C-1 Pursuant to our discussions, I submit for your consideration the enclosed letter proposal for employ- ment of this firm as special counsel to represent the City of Miami. A copy thereof is submitted to the City Attorney for consideration as to form and legal sufficiency. I understand that it is necessary for the proposal to be approved and authorized by the City Commission, Enclosed is statement for the retainer fee prescribed in the letter employment agreement, which is subject to the prerequisite approval and acceptance on behalf of the City. If there are any questions, please call me at your convenience. DAD/m CC: Mr. Vincent E . Grimm, Jr. Robert F. Clark, Esquire Sincerely yours, Darrey A. Davis, for the firm. "SUPPORT DOCU M 1E� FOLLOV+ 'ep . The City of Miami, Florida c/o Mr. Richard L. Fosmoen City Manager 3500 Pan American Drive Miami, Florida 33133 IN ACCOUNT WITH STEEL HECTOR & DAVIS 14TH FLOOR, SOUTHEAST FIRST NATIONAL BANK BUILDING MIAMI, FLORIDA 33131 STATEMENT FOR PROFESSIONAL SERVICES March 10, 1981 To retainer fee for legal services as special counsel in connection with matters involving the City of Miami Convention Center, as prescribed by letter agreement governing employment of special counsel, dated March 9, 1981. $25,000.00