New Orleans housing agency rapped by judge over delays in development

By John Breslin | Jun 17, 2018

NEW ORLEANS – A federal judge has laid most of the blame for a long-delayed development of affordable units on New Orleans' housing agency in a June 8 ruling filed in the U.S. District Court for the Eastern District of Louisiana.

Judge Carl Barbier ordered the Housing Authority of New Orleans (HANO) to pay just over $400,000 to an insurance company hired to oversee over the unit-development project after the contract with the original developers was terminated.

The judge ruled that neither insurer Liberty Mutual Insurance Co., nor original contractor Parkcrest Builders LLC, was liable to HANO. He did order Parkcrest to pay more than $100,000 to a subcontractor that sued in a related lawsuit.

This order follows claims and counterclaims litigation over the $11.3 million contract to develop the affordable housing units on Florida Avenue.

The court said the initial projected completion date was July 27, 2014, but that was not met, and Parkcrest was terminated in April 2015. Liberty Mutual agreed to take responsibility for the project, but continued to use Parkcrest as the main developer.

By July 2016, the court said the relationship between HANO and Liberty Mutual had deteriorated amid a dispute over whether the housing agency should issue a certificate of substantial completion. HANO then fired Liberty Mutual and employed another company, Colmex Construction LLC, and issued a certificate of substantial completion in March 2017

"To date, the project has still not reached final completion," Barbier said in his ruling.

Parkcrest, Liberty Mutual, and HANO, along with subcontractors, filed claims and counterclaims in an attempt to determine which was responsible for the delays. A seven day bench trial was held in February and early March.

Barbier said he found that the the project was substantially completed by Dec. 31, 2015, and that Parkcrest and Liberty Mutual "dutifully prosecuted the work at all times."

"The testimony and evidence revealed that HANO became nearly impossible to satisfy, at least as Parkcrest and Liberty were concerned," the order said. "HANO’s efforts were often unhelpful, vague and overly burdensome, which made Parkcrest and Liberty’s efforts to finalize the project more difficult, time-consuming and unreasonably tedious."

And, the judge said, HANO relaxed its requirements for Colmex to "achieve substantial completion by moving certain items to the final completion phase."

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