Town sues developer of marketplace - Tucson Local Media: Pima Pinal

Town sues developer of marketplace

Documents say Vestar, contractors responsible for 450K in damage to water tanks

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Posted: Tuesday, May 19, 2009 11:00 pm | Updated: 1:25 pm, Mon Apr 18, 2011.

Oro Valley has filed a lawsuit in Pima County Superior Court against the developer of its largest shopping center, Oro Valley Marketplace.

Town officials say shopping center owner Vestar Development Company and at least two its contractors negligently damaged a pair of freshwater reservoirs on the property.

At the time of the incident, in 2007, town officials estimated the company had caused more than $440,000 damage to the water tanks.

According to court documents filed by Oro Valley's Phoenix-based attorney, Burch and Cracchiolo, Vestar and its contractors built a dirt access road adjacent to the aboveground reservoir sometime after May 2007.

Oro Valley officials claim the road was poorly engineered and created an effective dam next to the reservoir that impeded water drainage once the summer rains began. Standing water caused the soil to erode around the reservoir's foundation, according to court documents.

In addition to the road trapping monsoon rainwater near the tanks and a surrounding masonry wall, town officials say contractors built an unlined retaining pond nearby. The town's claim says a contractor later installed a hydrant near the tanks that leaked, further eroding the foundation of the waterworks.

Water leaching from the road, unlined pond and leaky hydrant contributed to weakening the reservoir's foundation. The compromised soil then settled beneath the 200,000-gallon capacity tank, causing the structure to fall out of alignment.

In addition, the town's attorneys claim the watery soil caused damage to the wall that surrounds the reservoir.

Vestar has not yet filed a response to the town's legal claims.

The town first began battling with Vestar over the incident last July, when Town Manager David Andrews sent a fiery missive to company executives accusing the firm and its contractors of flouting town building codes, breaking a water main, damaging the disputed reservoirs and being a general nuisance to building safety staffers because of repeated last-minute engineering changes.

"The purpose of this letter is to ask for your personal involvement in remedying what has become an intolerable situation at the Oro Valley Marketplace development," Andrews wrote Vestar executives at the time.

In response, Vestar's project manager for the marketplace David Malin, sent a letter apologizing for the strain on town resources and, despite a plea for greater cooperation with the town, said contractors working on the shopping center expressed "frustration" over interactions with the town.

"However, as I think you would agree, the positive manner of handling this issue is not to engage in back-and-forth finger-pointing on many issues that are largely moot, but instead to positively and cooperatively move forward to complete the project in a manner that satisfies tenant timing and is not unduly burdensome on the Town," Malin wrote in response to Andrews' July 2008 letter.

Malin did not mention the damaged water tanks or any other of the specific claims Andrews made in his letter.

Shortly there after, the town's insurer, Southwest Risk Services, sought repayment from Vestar for the damaged reservoirs. Company officials refused to pay.

"I'm surprised they didn't just acknowledge that they damaged the reservoir," Andrews said.

The company's attorneys did, however, respond to a contractor last summer in regard to town requests for compensation.

Vestar's lawyers sent a letter to the contractor responsible for the work around the reservoirs, Hunter Contracting, insisting that it pay for any damages.

The company cited a contract it had with Hunter, whereby the contractor would bear the responsibility for any damages that occurred during construction.

"To the fullest extent permitted by law, the Contractor shall indemnify, defend and hold harmless the Owner (Vestar), Owner's lender, the Town of Oro Valley, Arizona…. From and against claims, damages, losses and expenses…" according to a letter Vestar lawyers sent to Hunter.

The town seeks to have Vestar pay the repair costs, lawyers' fees and any additional damages the court awards.

Malin did not return phone calls requesting comment on the lawsuit.

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