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SBJ/September 5 - 11, 2005/Facilities
D.C. deadline comes with price tag
Published September 5, 2005
Clark Construction Group, recently approved as the lead contractor for the Washington Nationals’ new ballpark, is facing potential fines of $100,000 a day in liquidated damages if the stadium is not ready on its March 1, 2008, due date.
The damages would be twice the company’s typical liability for high-profile construction projects and as much as 20 times the daily fine for late delivery of small-scale buildings.
The clock’s ticking for the Washington Nationals, who expect a new home for 2008.
“To the extent it’s practical, we’re going to shift the risk of this over to the builder,” said Allen Lew, the D.C. commission’s executive director. “The liquidated damages are part of an overall risk management program we’re developing.”
Gregory Colevas, senior vice president for Bethesda, Md.-based Clark, said the company wants a provision for liquidated damages in its contract for the ballpark. Such terms are typical for major construction projects, allow for delays beyond a builder’s control and provide more certainty than leaving a builder liable for actual damages as a result of late completion.
Colevas declined to say whether the company would sign off on the $100,000-a-day number.
“That’s definitely a very stiff figure, very high,” Colevas said.
The ballpark construction timetable has been a steady source of debate within the baseball and Washington, D.C., business communities. The city’s contract with Major League Baseball, current owner of the Nationals, calls for the stadium to be ready for the start of the 2008 season. Sports commission officials insist that goal is still realistic, despite the need to buy the stadium land, and then clear, environmentally remediate and build upon it in a 30-month span.
To that end, initial offers to the landowners in the stadium footprint went out last week. If purchase agreements do not materialize in 45 days, the city will start efforts to seize the land through eminent domain.
District officials also will need to fend off inevitable legal challenges and avoid any further political hiccups from the unpredictable D.C. Council.
Several prospective Nationals owners, however, have quietly made financial plans to be in the team’s current home, RFK Stadium, for the 2008 season, making them temporarily without the increased revenue due to come from a new ballpark.
“The smart bet is not on this being ready for Opening Day 2008,” said one Nationals bidder, speaking on the condition of anonymity.
Colevas acknowledged the construction timetable for the ballpark is “extremely tight,” but he said the March 2008 deadline can be met if Clark begins its work in February 2006.
Clark completed initial construction of the Washington Redskins’ FedEx Field in 17 months, a point the company holds out as evidence of its ability to work fast. Once open, though, fans complained of the stadium’s spartan conditions, and both then-team President John Kent Cooke and current team owner Dan Snyder deemed it necessary to pour tens of millions of dollars into upgrades.
The city faces its own penalties if the new ballpark is not ready for the 2008 season. If that deadline is missed, the Nationals will not be obligated to make a $5.3 million lease payment to the sports commission. If the stadium still isn’t ready in 2009, the club can recoup up to $19 million in lost revenue.
Clark is teaming with Hunt Construction Group and Smoot Construction on the Nationals’ project.