Cedar Rapids contractor sues city on Vets Building project

CEDAR RAPIDS — Rinderknecht Associates Inc., the contractor for the $20-million renovation project at the city's flood-damaged Veterans Memorial Building, is suing the city of Cedar Rapids in a contract dispute.

The Cedar Rapids firm says the city owes it $1.434 million on the project plus an additional amount of ongoing interest, court costs and attorney fees.

The lawsuit came to light this week as the City Council prepared on Tuesday to hire a Des Moines law firm, Ahlers and Cooney PC, to represent the city in the litigation with Rinderknecht.

City Council member Scott Olson on Monday said Mayor Ron Corbett had asked him and council member Ralph Russell to negotiate with Rinderknecht to try to work through the specific issues in the contract dispute.

Rinderknecht filed its lawsuit on Aug. 21 when the city decided to delay a partial payment of the dollar sum in dispute, said Olson, who is the council liaison to the city's Veterans Memorial Commission.

Much of the project is begin funded with disaster dollars from the Federal Emergency Management Agency, and federal rules have prompted the city to further review the project costs, Olson said.

In its lawsuit, Rinderknecht states that it has been paid $10.724 million to date on the Veterans Memorial Building project.

The lawsuit states that the company has been unpaid for additional costs that resulted from problems with asbestos abatement in the building and from flaws in the city's construction plans.

Rinderknecht had to shut down the project in part or in full from May 17, 2012, through Sept. 4, 2012, because the city had not removed all the hazardous materials before Rinderknecht began work, the lawsuit states.

Another delay came because the plan's dimensions for the roof were incorrect, the lawsuit states. The lawsuit says the city also has not paid for changes in work that the city directed the company to perform.

The city's Olson said the City Council and the Veterans Memorial Commission will meet in closed session at an upcoming commission meeting to chart out a plan designed to negotiate a resolution to the dispute with Rinderknecht.

The building is occupied, Olson said, and the Rinderknecht lawsuit said the company's work on the project is largely complete.