City Terminates Contract for Bike Undercrossing to Cannery

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In the latest saga involving the Cannery Project, the city announced this week that the city has terminated the contract of the Northern Pacific Corporation for completing the Cannery Bike and Pedestrian Undercrossing at Covell and L.

The undercrossing and safe passage of bikes and pedestrians from Cannery under Covell was a key component of the city’s approval for Cannery.  The city in a statement indicated that while “significant work has been completed on this project,” the work “is on hold at this time.”

The city writes: “The progress of this project has been much slower than planned, and the current hold is due to the inability of the contractor to perform adequately.

“The City of Davis has terminated the contract and alerted the surety (insurance company),” the statement reads. “This is a serious matter and an infrequent occurrence. We acknowledge the inconvenience and impacts to the community and appreciate residents’ patience.”

The city goes on to say: “(W)e can assure the public that by taking these actions, the City has set in motion the means to hire a new contractor through the surety and complete the project. Unfortunately, this is not likely to be resolved quickly, but the City must act as good stewards of City resources and follow this process.”

In the meantime, the city has put up protective fencing around the project to alleviate any safety concerns and Covell will remain open to four lanes of traffic and will remain that way until a contractor is hired to complete the work.

In documents obtained by the Vanguard, on May 3, 2019, the city sent Bryan Koeberer, CEO of the Northern Pacific Corporation based in Napa a letter with “Notice of Intent to Terminate for Cause.”

In that letter, the city noted: “NPC has effectively abandoned timely performance of the Project, and is approximately 85 calendar days behind schedule in completion of the work on the Project.”

The city had “previously notified NPC on several occasions that it is behind schedule.”

According to the contract signed almost exactly a year ago on May 29, 2018, by Mr. Keoberer, the work was to start on September 4, 2018 and be completed January 28, 2019.  The city awarded them with the bid for a sum of $2.2 million – to be paid for from the Cannery developers.

As of May 3, “The Project is now over three months behind schedule. This delay is not only unacceptable from the City’s standpoint, but has also had a very detrimental impact to the public resulting in numerous complaints from the community.”

The city was “very concerned regarding the failure of NPC to prosecute the work in a manner that ensures timely completion and questions whether NPC has the capability to perform the balance of the work in an expeditious manner to mitigate further delay.”

The city raises the issue of “copious stop payment notices from subcontractors, including a number of critical subcontractors, employed by NPC to perform work on the Project. To date, the City is not aware of NPC resolving any of these stop payment notice claims. This is problematic because several of these subcontractors are critical path subcontractors whose work is necessary to finish the Project, but have ceased all operations and demobilized from the Project due to their unresolved claims against NPC.”

The city gave Northern Pacific until May 13 to resolve 22 issues, including a number of stop payment notices.

On May 17, the city wrote Mr. Keoberer back with a Notice of Termination for Cause.  In the letter, the city indicates that, following their previous notice, “the City was contacted by NPC’s legal counsel with a proposed plan to have R.E. Maher,” a concrete subcontractor, return to work on the Project.

Under that proposal the city would have taken funds going to Northern Pacific and paid them directly to R.E. Maher.

The city writes: “The City rejects this proposal for failure to adequately address the defaults set forth in the City’s Notice.”

In the letter, the city states that the project cannot be completed “if the sole action taken by NPC is to re-mobilize R.E. Maher. Namely, the City cannot open the bike/pedestrian path to the public with only the outstanding concrete work completed.”

The city also required, at a minimum, “the electrical subcontractor and fencing subcontractor to be remobilized to provide lighting and railings on the Project.”

There were a number of other issues raised by the city that would have to be completed.

The city writes: “In order to re-mobilize each of the foregoing key subcontractors and vendors, funding to satisfy their outstanding claims would need to be obtained from a viable source. Such funding is not available via the remaining Project funds on account of the numerous stop payment notices and liquidated damages for which the City is currently withholding funds.”

The city writes: “NPC has failed to cure any of the defaults set forth in the Notice or present a realistic and cogent plan to complete the Project.”

Based on that, the city terminated the contract for cause.

They added, “The City hereby makes a claim against the payment and performance bonds issued by Surety seeking performance of the outstanding obligations under the Agreement and reimbursement of all damages arising out of NPC’s defaults.”

In a statement from City Manager Mike Webb, he told the Vanguard, “The project, which is funded by Cannery Development Agreement funds and development impact fees, will provide grade separated bicycle and pedestrian access to the Cannery neighborhood, in addition to improving ADA access along the pathway.”

He said, “The circumstance of the contractor failing to fulfill their contractual obligations to complete the job is very frustrating for everyone.  While this delay is outside of the City’s control it is still unfortunate and an inconvenience to the community.  “

Mr. Webb indicated: “Fortunately, these situations are exceedingly rare and the City is well protected via our contract which provides remedies (via a Surety) to ensure the job is completed and that the City is not financially harmed in the process.  Our staff and legal team are working diligently to ensure completion of the project as quickly as possible.”

Mayor Brett Lee and Councilmember Lucas Frerichs each declined comment to the Vanguard.

—David M. Greenwald reporting


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About The Author

David Greenwald is the founder, editor, and executive director of the Davis Vanguard. He founded the Vanguard in 2006. David Greenwald moved to Davis in 1996 to attend Graduate School at UC Davis in Political Science. He lives in South Davis with his wife Cecilia Escamilla Greenwald and three children.

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14 thoughts on “City Terminates Contract for Bike Undercrossing to Cannery”

  1. Tia Will

    the City is well protected via our contract which provides remedies (via a Surety) to ensure the job is completed and that the City is not financially harmed in the process.”

    While the city may be “well protected” the citizenry most assuredly is not. Traffic, bicycle, and pedestrian safety were major issues of contention when the Cannery project was being debated. There were many of us who objected on the basis of no clear assurances that these issues would be addressed. Indeed it would appear they still will not be long after the opening and impacts of the Cannery are being seen. While it is certainly a positive that the city will be financially protected, this is no help at all for those who essentially “cannot get there from here” in the transportation manner of our choosing. Surely Mr. Webb might note that this is more than a slight inconvenience both personally and financially for those who prefer not to be car dependent.

    1. David Greenwald

      In fairness, he did’t say slight, “While this delay is outside of the City’s control it is still unfortunate and an inconvenience to the community.” I would also note that the first part of his sentence mentioned “to ensure the job is completed” prior to mentioning get “that the City is not financially harmed…”

      Those seem like two of the most important considerations as well as insuring safety for those utilizing the facility.

      What is it that you think the city should have done differently here?

      1. Rik Keller

        Greenwald: neither you or Webb are really addressing safety. It’s still just primarily characterized as an “inconvenience,” which is language that is attempting to minimize the problem.  I expect better from a supposed “watchdog” organization.

      2. Tia Will

        You are right. I misattributed the word “slight” to him, although I still feel the city, in general, downplays citizen concerns to city finances.

        I would have like to have seen the completion of the underpass as a condition prior to the start of the project.

  2. Alan Miller

    OH IT’S MUCH WORSE THAN THAT.

    This ‘solution’ doesn’t even solve the transportation issue.  It is so bad a ‘solution’, that it will be under-used and many people will continue to just bike over the Covell Overpass.

    I was told the night before the Davis City Council made the decision to build this terrible design, that they planned to move forward with the direct overpass — passing under Covell, from Cannery to the Little League Park.  It was the preferred alternative.  But it was at the last minute changed to this ‘new, budget’ plan, ‘saving’ $2 million.  I didn’t go to the meeting because this wasn’t even on the table, and all indications were the preferred plan was going to sail through.  This mess all seems like Karmic payback for this terrible decision.

    Here is a letter I wrote to the Council on May 3, 2016:

    AN OPEN LETTER to the DAVIS CITY COUNCIL

    Dear City Council,

    Developments are opportunities for Davis to have necessary infrastructure built to help mitigate the effects of the development, improve alternate transportation access, and improve safety.

    There is no issue from recent-year City Councils that I consider a more colossal failure than the failure to secure a bicycle and pedestrian path from the Cannery development to the H Street bicycle/pedestrian tunnel.  I am personally and individually disappointed with those of you who enabled this failure.

    The H Street connection was the gem in the packet of infrastructure improvements from building the Cannery, and cause for my support of a project I was otherwise lukewarm about at best.  Any over- or under-crossing of a railroad to modern standards is going to be expensive.  That the expenses were not properly evaluated and the developer after-the-fact allowed to disengage from paying a fair share (read DO-able) amount of the cost is a City failure.

    The H Street tunnel connection would allow bicyclists and student traffic to access the East-West path that leads directly to Davis elementary, junior high and high schools, as well as downtown.  The exposure to auto traffic in the daily student commute would have been greatly diminished.

    The ramp-up-to-Covell connection is cheap and rather non-functional.  It places bicycles on a path they would get on anyway to cross Covell, and requires bikes to cross at the intersection of Covell and F, a rather busy and questionably safe (free turns) intersection, one way on the wrong (left hand) side.

    As you know, I am not an anti-development Davis citizen.  I call’s ’em as I sees ’em.  I continue to oppose Measure R for the stranglehold it has put on our City.  I support Nishi largely because of the infrastructure improvements it may bring.  I supported Covell Village for largely for similar reasons.

    But Measure R did not come about because a small group of anti-development extremists magically became the majority on election day.  Measure R came about because the majority of Davis residents were repeatedly disappointed in the decisions of those past City Councils, whom appeared to give far too much to the developers and too little to Davis itself, similarly to how the Cannery is now playing out.

    Davis needs to get something significant, infrastructure wise, out of each development proposal, at least to gain my support.  When the gem is promised, the gem brings citizen support. When the gem is taken away, this breeds growing mistrust in the City Process.  Should you as Council members fail to find a way to finance a functional crossing from the Cannery similar to the H Street connection, you may be breeding yet another anti-development activist in Davis.  If development brings nothing but more congestion along with possible, theoretic, economic gain through trickle down, that isn’t enough.  Not for this citizen.

    Your acceptance of the developer’s original, cheap and virtually useless ‘alternative’ to the H Street connection will do nothing to further my trust in the Davis City process or Davis City promises, and will do little to improve bicycle connectivity or route-to-school safety.

    Meat, don’t do it!

    Alan C. Miller

  3. Tia Will

    I also think that Alan Miller has this right. I had forgotten the details of the initial proposal, but clearly, the “compromise” solution has not come to fruition and due to the delays in implementation will doubtless cost even more to complete than if it had been done at the beginning of the project.

    1. Alan Miller

      I don’t know if it will cost more.  The contract issue and the design issue are quite different.  But seeing this terrible design be dragged out in this forever construction fail and contracting issue just scrapes open the old wounds of what a terrible design it is.

  4. Bill Marshall

    There is an old saying, that I’ll re-phrase… there are some things the City has control over (new development) and some things the City has little/no control over (privately owned right of-way/property and existing private improvements)… the wisdom is to understand the difference, or one can just criticize the situation… and those who have to operate following laws and facts.

    A right of way and improvements on the E side of the UPRR, from Covell to the H St bike tunnel, has always been a “non-starter”, as much as folk would like to deny that.  Some City staff pointed that out when it was first posited… looked good on “pictures” but had little/nothing to do with reality…

      1. Alan Miller

        Also, as I accepted that Cranbrook folks weren’t gonna cooperate (I’ve seen examples where bike paths go right through apartment complexes without issue — in fact, see E side of H Street tunnel), I was in favor of the ‘next best solution’, which was also the City’s preferred alternative up until the night before the vote.  That’s what I took issue with here, that a decent proposal that would have solved several transportation connections, was voted down in favor of a last-minute cheapee.

      2. Bill Marshall

        How so…

        The R/W did not/does not exist… when you walked it, you were technically trespassing on private property.  The owners of Cranbrook were not willing to grant/sell right of way… had they been willing to, they would have lost a row of parking, and would have probably demanded a fence/wall to protect their residents using the rest of the lot from possible, ‘hard to surveille’ property crime from those who had access to the path.

        UPRR same as to willingness to sell/grant their R/W, and whether the property came from themselves or Cranbrook, they would have either demanded a wall or fence to keep folk off their R/W and tracks, or do it themselves (you, better than most, should realize that).  BTW, use of eminent domain on the apt side is worlds different from eminent domain regarding RR R/W…

        So, there would be a maybe 20 foot wide, 800 foot long ‘gauntlet’ fenced on both sides.  How do you think that would work from an actual or perceived personal safety perspective for likely users of the path?

        That’s “how so”…

        1. Bill Marshall

          Oh, and Alan, if you’re willing to walk/trespass with me along that 800 foot stretch, I can show you all the ‘fatal flaws’ with that design concept… just name date/time.  Might even be best at night, to fully understand the personal safety thing… just not near the full moon… that would tend to minimize the personal safety concerns…

  5. Bill Marshall

    Another truth…

    This situation is exceedingly rare, getting to the point of contract termination on construction contracts… have dealt with ‘mechanics/suppliers’ liens/stop payment notices where the “prime” failed to pay subs/suppliers… but in 35 years ‘in the business’ never had things go this far… we sometimes had to make payments to the prime, that had to be endorsed by the subs, to ensure everyone “got their due”…

    One of the problems is going with “low bidder”… another is not demanding, and following up on, ‘previous jobs successfully completed’… yet, it gets to, ‘competent, until proven incompetent’… no contractor would be able to build a ‘track record’ is they couldn’t get a contract until they had a long ‘track record’…

    Many European countries, on public contract bids, throw out the low bid and the high bid, before considering the others… not at all clear if this would have any difference in the topical situation… but it might have…

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