Education

University of Iowa pays Modern Piping for Children's Hospital work, capping yearslong saga

'Today the university paid the remaining judgment plus interest'

Fans wave at the UIHC Stead Family Children’s Hospital during the first quarter break at an Iowa Hawkeyes football game with UNI at Kinnick Stadium in Iowa City on Saturday, Sept. 15, 2018. (Rebecca F. Miller/The Gazette)
Fans wave at the UIHC Stead Family Children’s Hospital during the first quarter break at an Iowa Hawkeyes football game with UNI at Kinnick Stadium in Iowa City on Saturday, Sept. 15, 2018. (Rebecca F. Miller/The Gazette)

IOWA CITY — Ending a long saga that involved numerous judges and legal appeals, an accusation of extortion and concerns over the safety of young patients, the University of Iowa on Wednesday paid the $12.7 million it still owed a Cedar Rapids contractor for work on the Stead Family Children’s Hospital.

The payment comes a day after a Johnson County judge cleared the way for the Sheriff’s Office to seize UI assets to satisfy the debt following numerous rulings in favor of Modern Piping.

IOWA CITY - With another year of construction left on a gleaming new children's hospital, University of Iowa Health Care executives ordered a contractor to make a change: These manual doors for the lobby library, theater, pharmacy and other areas just won't do.

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UI officials had declined Tuesday to comment on the judge’s ruling but earlier in the day said they were not willing to pay Modern Piping the millions until it “fulfilled its contractual responsibilities.”

“All Modern Piping needs to do is provide the final construction record documents, which they say they have, to the design professional for review and approval,” UI spokeswoman Jeneane Beck told The Gazette.

Modern Piping long maintained it already provided final construction documents and had received approval. On the other hand, the UI insisted the contractor was derelict in its contractual obligations — including providing marked-up hard-copy documents showing details of how the hospital was built.

But, according to a UI statement issued at 4:30 p.m. Wednesday, the court decision allowing enforcement to collect changed things.

“After consulting with the Attorney General’s Office, today the university paid the remaining judgment plus interest,” the statement said. “This represents final payment to Modern Piping, which delivered what they believe are the final construction records to Heery, the third-party design professional.”

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The university didn’t immediately answer questions from The Gazette about whether Modern Piping provided additional or different construction documents Wednesday than what it had earlier provided.

“The University of Iowa looks forward to Heery’s review and approval of Modern Piping’s final construction records (final corrected as-builts, final corrected BIM model, and Leed certificates) as required by the contract,” according to the UI statement.

Short for building information modeling, BIM is a digital representation of the characteristics of the facility.

UI officials also didn’t respond to The Gazette’s question about whether it had signed a settlement with Modern Piping, which had been a recent sticking point.

In early 2018, Modern Piping won a $21.5 million arbitration award mostly for unpaid work on the 14-story, $392 million UI Stead Family Children’s Hospital.

A District Court judge affirmed that award in August, prompting Modern Piping to ask the Sheriff’s Office to garnish UI bank accounts and potentially tap the UI-owned Jackson Pollock “Mural” painting to cover the debt.

A judge halted that execution pending a UI appeal — promising the university would be capable of satisfying the judgment if its appeal was unsuccessful.

The appeal failed April 3 when the Iowa Court of Appeals upheld the lower court’s affirmation.

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The UI initially announced plans to pay Modern Piping the balance, but then UI President Bruce Harreld took that back April 18 — telling the Board of Regents that Modern Piping still owed the university the “as-built” documents.

It was during that board meeting that Harreld agreed with a regent who said Modern Piping was engaging in extortion. Harreld also described safety concerns he had for patients at the hospital since the UI didn’t have the required records to see just what was where in the walls.

Regents at the time supported the university’s refusal to pay without having the records.

l Comments: (319) 339-3158; vanessa.miller@thegazette.com

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