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Parks district replaces Phase 1 rec center contractor

PenMet Parks fired a contractor for not finishing Phase 1 of its community recreation center project that the firm claims is practically complete and only being held up by the parks district.

On Aug. 3, 83 days after a May 12 deadline for “substantial completion,” PenMet issued a seven-day notice of termination to Grenlar Construction and withheld the balance of contract funds until the cost of completing and correcting the work has been determined, according to a statement the district sent to Gig Harbor Now on Sept. 1.

The front of the former Performance Golf Center as it appeared before the renovation to Phase 1 of the community recreation center. Ed Friedrich / Gig Harbor Now

The parks district issued the release, it said, to correct inaccurate statements by Grenlar to Pierce County and other government officials that PenMet acted egregiously by withholding 50% of the construction contract price despite the company claiming that it has completed the project according to the plan.

Contract was for $1.46 million

The Kenmore-based firm was contracted on July 5, 2022, to renovate the 7,000-square-foot former Performance Golf building at 2416 14th Ave. into park district administrative offices and community space. The amount, with change orders, was $1.46 million.

“Almost three months after the substantial completion date had passed, there was substantial work remaining as well as work that needed to be corrected because it was either unacceptable or contrary to the contract requirements,” the statement reads. “Consequently, on Aug. 3, 2023, PenMet Parks issued a notice of termination for cause to Grenlar.”

Grenlar has been paid $882,000. About $573,000 is being held back, according to a resolution the board passed Tuesday to hire other companies to complete the work. The firm sent a 73-page response to PenMet on Aug. 10 claiming the unpaid balance is $693,000 — more than $750,000 with interest.

PenMet staff members at the front of the renovated Phase 1 community recreation center welcome guests to last month’s groundbreaking for Phase 2.

“PenMet is withholding approximately 50% of money owed to Grenlar on a project that is 99.7% complete!” the response states. “This is a bullying tactic at best. It has caused considerable harm and is in direct violation of PenMet’s prompt payment obligations specified by statute in Washington state.”

Office lease extended

The parks district intended to move into the building this summer. Instead, at a July 18 meeting, the board approved a three-month lease extension on its offices at 5717 Wollochet Drive. The construction contract requires the builder to pay PenMet $600 per calendar day in damages from May 12 until completion — more than $70,000 to date. Those fees are expected to cover the lease extension, according to documents. They are being assessed but not collected at this time.

At its meeting Tuesday, the park district board approved hiring J.A. Morris Construction of Olympia to complete the work for $221,000, minus the disposal of concrete and debris, and correction and repair of the septic system. Jody Miller Construction of Spanaway will be paid $53,000 to take away the debris. On July 18, the Spanaway firm was awarded a $20.7 million contract to build Phase 2 of the CRC. A groundbreaking ceremony was held on Aug. 24.

A contractor for the sewer job hasn’t been determined.

Sketch shows former Performance Golf Center building in the distance that has been renovated as Phase 1 and Phase 2 that broke ground in August in the foreground. Courtesy of PenMet Parks

Grenlar claims in its response that the only two items holding up substantial completion are the septic system and the automated portion of the front door. The septic work can’t be performed until the drain field is fixed, which it says is PenMet’s responsibility, as is the door.

“Until PenMet finishes these two items, substantial completion will not be met and is out of Grenlar’s contractual agreement and control,” it states. … “Grenlar completed all tasks relating to substantial completion and is still currently waiting for PenMet to complete these tasks. The delay in reaching substantial completion is 100% on PenMet.”

PenMet did not immediately respond to Gig Harbor Now’s request for comment on Grenlar’s response.

Contractor contests termination

Glenmar refuted each of PenMet’s reasons for firing the company.

“You have presented zero grounds for termination,” it wrote. “You may terminate Grenlar for convenience, but you do not have basis to terminate for cause. Your letter is dangerous, over the line, and has caused/is causing harm.”

Grenlar has not heard back from PenMet since the Aug. 10 letter, said Chief of Operations Kalen Grenzebach.

Side view of the former Performance Golf building before renovation. Ed Friedrich / Gig Harbor Now

The parks board provided contract authority to Executive Director Ally Bujacich, so the firing didn’t require board action, said spokeswoman Zemora Murray.

If the costs to complete Phase I exceed the Grenlar contract balance, PenMet will seek reimbursement from Grenlar’s payment and performance bond so the costs are not borne by the taxpayers, according to the media statement.

Taxpayer dollars

“We impressed upon the contractor the importance of completing the project on time, but when the work was not getting completed despite our best efforts and the date had passed, there was no other alternative but to terminate the contractor,” Murray said. “PenMet Parks will hold the contractor responsible for any costs it incurs in completing the work that exceeds the agreed-upon price. The taxpayers would expect no less.”

PenMet can’t occupy the new offices until the septic work is complete. It’s lease extension runs through October.

“We are taking all the necessary steps to complete this project as soon as possible,” Murray said.

Flags are raised beside Phase 1 during a groundbreaking ceremony last month for Phase 2.

Also Tuesday …

Also at Tuesday’s meeting, the parks board approved a collective bargaining agreement with Teamsters Local Union 313 for park grounds workers through 2026. Parks grounds specialists’ salaries range from $51,676 to 68,881 depending on step, park maintenance specialists from $55,816 to $74,400 and lead grounds specialists from $64,979 to $86,613. They receive 13 holidays and 12 to 20 vacation days depending on service time.

The board also gave the go-ahead to apply for a Washington State Recreation and Conservation Office local park maintenance grant of up to $100,000 to help replace playground surfacing and/or aging equipment at Sehmel Homestead Park.