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24 August 2007

HACC applauds settlement of dispute between developer and builder over Lancaster Campus expansion

Pitney Road Partners and Warfel Construction Company have reached an agreement which ends their dispute over payments for expansion of HACC's Lancaster Campus on Old Philadelphia Pike. The dispute ends a two-year standoff between the two and paves the way for Warfel to reach agreements with subcontractors on the project.

There were also disputes between HACC and Pitney Road Partners and between Pitney Road Partners and the banks which provided project financing. Separate agreements signed at the same time have also provided a mechanism to resolve those disputes. In turn, Warfel agreed to hold HACC, Pitney Road Partners and the banks harmless and to protect them from any litigation from the subcontractors.

"We are very pleased that Pitney Road Partners (operating under the name Redcay College Campuses I) and Warfel have been able to reach a settlement," said George Franklin, HACC's vice president of finance. "While we weren't directly involved in the dispute between Warfel and the subcontractors, we were concerned about the issue and glad that it has been put to rest."

This action allowed the banks to release money in project funds which had been held pending settlement of the dispute between Redcay and Warfel. The exact amount of those payments was not disclosed pursuant to confidentiality agreements between all the parties involved.

"We are particularly pleased that the subcontractors who still had bills outstanding for their work on the expansion will be paid," Franklin said.

In a separate agreement, HACC and Redcay College Campuses I agreed to submit their differences regarding the lease agreement including rent and certain other costs to binding arbitration.

"These issues were not involved in the disputes between Warfel and Redcay, but we're pleased that these are now moving toward a final settlement as well," Franklin said.

Among the disputes, HACC and Redcay disagree about the date on which the campus was complete as defined by the lease. HACC maintains that, since the building was not “complete” on the agreed-upon date, that the college does not owe Redcay rent for the first four months that the building was in use.

The arbitration is expected to take several months.

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