On September 10, 2018 APR Construction Inc., a small business from La Mesa, won a $202,000 jury verdict against the City of San Diego, which fired them from the Central Avenue Mini Park and Skate Plaza project in June 2015.
The story began in 2011 when the Mid-City CAN Youth Council started a campaign to bring a skate park to City Heights. Neighborhood youth wanted a place to skate, free of interference from cars, cops and property owners. The City Heights Recreation Council jumped on board along with City officials.
In 2013, an $846,000 grant from the California Department of Housing and Community Development was designated to add a skate plaza (mini skate park) to existing plans to build a mini park on a plot squeezed between Central Avenue and the northbound side of the 15 freeway, two blocks south of University Avenue in City Heights.
APR (All Phase Remodel) owner Eric Scarbrough says he had been doing public projects for years when he saw the notice from the city’s Public Works Department about the park project. He thought it was a great opportunity.
In August 2014 the City awarded the bid to APR. Scarbrough says he was able to bid low because he self-performs almost all the work and subcontracts little to none of it. He also relied on APR’s status as a Small Local Business Enterprise and an Emerging Local Business Enterprise, which provides a bidding advantage under City policy.
Work on the mini park was to begin in October and the skate plaza in December. Both were due for completion in September 2015.
Scarbrough says he worked on the project from October 2014 through June 2015. He completed plumbing, demolition and trench work, and he built the block wall separating the residential area from the park.
But eventually, the city fired APR for “lack of diligence” and “delayed progress.” However, Scarbrough says it was the City who lacked diligence and delayed the project.
First, Scarbrough says, the City was not paying APR for its work. Four out of six invoices were not paid. Scarbrough says the City would demand a small revision to an invoice and after he revised it the City would demand another small revision, then another; instead of telling APR all the revisions they wanted at once.
The Whitebook, the City’s specifications and procedures manual for public projects, requires the City to submit any challenge to an invoice order within seven days of receiving it. If the City fails to do that it’s liable to pay within thirty days.
For most of APR’s unpaid invoices the City did not request a revision. It simply ignored them, Scarbrough says. “The city never explained why we were not getting paid. My project manager inquired about unpaid invoices and was given the runaround by City Resident Engineer [Jorge Acevedo.] The city intentionally delayed paying us,” says Scarbrough. “They stopped paying us for four consecutive months.”
Scarbrough believes the City failed to pay because it ran out of money for the project after the first two payments. He points out that Hazard Construction Company, the company that replaced APR and completed the project, also had problems with delayed payments.
Eric’s wife Vanessa Scarbrough suggests the reason the City gave them a bad-faith default termination was to get access to their surety funds, which she believes the City needed to complete the project. She points to an email the City’s Project Manager Alexandra Corsi sent on January 8, 2016 about the money APR’s surety provided for the project. Corsi stated, “The good news is there is money in the project :).”
Regarding a state grant that was provided to fund part of the project, Scarbrough explains, “The city had to have substantial completion in order to receive any monies from the block grant, so the City still had to find a way to fund the project.”
APR had another problem the Whitebook didn’t help them with — the City’s plans were incorrect. When discovering a problem with the plans after the project begins, one option a contractor has is to submit a Request for Information to the City.
However, Scarbrough says the Whitebook “does not have any RFI deadlines and so they can take as long as they want without any consequences.”
One hang-up with the plans was the off-site storm drain catch basin. The plans had incorrect elevation information for it. APR submitted a Request for Information and a Submittal (another way to communicate with the City about the project.) Acevedo continued to pressure APR to keep moving forward with the work. Scarbrough says Acevedo didn’t address the problem. He told them to continue work according to the plans, which for APR wasn’t an option. “Contractors cannot move forward until RFIs are answered. If APR would’ve built per plans the catch basin would’ve stuck out one foot off the ground. The city’s plans described a specific slope for the storm drain pipe in order for the water to run down at a certain speed down to the manhole. If the slope gets built too high then the water will run down the pipe too fast and cause interior deterioration of the manholeWe would’ve completed more work had the city not delayed RFIs and submittals. Some RFIs were not even answered.” says Scarbrough.
“Despite APR’s efforts to propose a solution to what was a relatively straightforward and simple problem, the City never facilitated a resolution of the issue by the time of the termination.” They waited more than four months for the City to respond to the issue before they were fired.
Hazard ran into the same problem when they took over the job in September 2015. Their first RFI was about the elevation issue with the storm drain catch basin. Despite Acevedo’s attempt to force APR to build it according to plans the City finally acknowledged there was a problem with the plans after Hazard took over and raised the same issue.
Hazard was first scheduled to complete the project spring of 2016. The park didn’t open until September 2016, a year after APR’s original completion date.