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Early Loss at the Sports Park

Huntington Beach sues to recover money, but the builder says he was barred from finishing.

August 21, 2004|Stanley Allison | Times Staff Writer

In another setback to the city's already strained finances, Huntington Beach is trying to recoup funds from a contractor for construction of the second phase of a sports complex that was never built.

The contractor, who was hired despite a history of failing to complete similar projects, was paid nearly $1 million by Huntington Beach before work was to begin, city officials said.

Now, six months after the city had planned to open the five-acre complex -- featuring batting cages, an indoor soccer field, roller-hockey rink and concession stand -- officials are instead left with concrete and sod and no amenities. About 50% of the work is done, and the city is trying to determine how much money needs to be repaid.

Salem, Ore.-based contractor Joseph O'Connor says he was unfairly barred from completing the work and may sue the city. The dispute, which has stalled all work on the complex in the city's Central Park indefinitely, has left officials questioning how they lost so much money and reviewing their procedures for choosing contractors.

O'Connor, an attorney, has been involved in various deals to build and operate soccer arenas and sport complexes around the country since at least 1997. He said he has completed projects in Dublin, Ireland, and Mexico City, among others. But in the states, O'Connor's track record is tangled, and he was recently arrested for failing to appear in court on another project.

In 1997, he bought a 14-acre parcel in South Salem, Ore., where he planned to open the Sundome Soccer Pavilion, a complex of indoor fields.

But a year later, the project was strapped for cash, bills went unpaid and several liens against the project were filed.

A white dome that had been built to shield the soccer fields from inclement weather was left unattended and collapsed in a storm.

A similar project in Yakima, Wash., also was beset by financial difficulties and was the subject of several liens. Neither job was completed.

But O'Connor described by a soccer club owner as a "charismatic" salesman, was undeterred. Through his dealings with the United Soccer League, he was approached in 2002 by a soccer club in Kalamazoo, Mich.

"He had been giving some literature to people showing that he was a person that could build [dome] structures" like the club wanted for about 2,000 youngsters between the ages of 4 and 14, said Chris Keenan, owner and operator of the Kalamazoo Kingdom soccer club.

O'Connor was hired to build a 28,000-square-foot facility with an artificial turf soccer field, bleachers, concession stand and restrooms under a 30-foot dome. The cost was to be nearly $1 million.

"Joe said to get this thing rolling, we need cash," Keenan recounted.

"We put some money down to show we were serious."

O'Connor was given $280,000 by the club. In the first month, the club officials asked O'Connor for drawings, plans and other evidence of his progress. But, "nothing was getting done," said Keenan.

He said soccer officials began calling some of the manufacturers O'Connor had said were making parts for the arena, but were told nothing had been ordered.

"I figured all the money was gone," Keenan said. "I said 'Where's the money? What have you done?' It was a really bad time. It nearly ruined us personally and professionally."

The club sued and won a $854,000 judgment against O'Connor in September 2003, much of it for punitive damages. He has paid the club $70,000 that he said he received from selling the dome to a soccer club in Mexico.

A warrant for O'Connor's arrest was issued in May after he failed to appear in an Oregon court to disclose his assets. He surrendered to authorities August 6, was booked, released and given a date to reappear.

He is scheduled to meet with attorneys to examine his professional and personal assets Aug. 31.

While he was having difficulties in Kalamazoo, O'Connor successfully bid on the contract to build and operate the second phase of a sports complex in Huntington Beach's Central Park in July 2003. The job was to cost $2.3 million. He had no connection with the first phase of the complex, which was built.

O'Connor was given nearly $1 million upfront, before he had performed any work, city officials concede.

"He was paid upfront because he had to get things manufactured," said Jim Engle, director of community services, whose predecessor oversaw the deal.

"We paid too much up front," Engle said. "That's the problem."

O'Connor said he would have been able to complete the project if the city had allowed him to tap a city contingency fund that had been set up for the project.

Engle said the contingency fund was for emergencies, not for routine costs.

"The bottom line is he didn't do the job he was supposed to do," Engle added.

The city sued O'Connor in July after he missed a March 20 completion deadline, and City Administrator Penny Culbreth-Graft has launched an investigation to determine how the city placed itself in this position.

The setback is the latest in a series of fiscal problems for the city.

In July 2003, the city lost an appeal to a court ruling that said an increase in a tax it had collected for years to fund employee pensions was unconstitutional and that homeowners were entitled to refunds.

Refunds will cost the city approximately $12.5 million.

Also, officials were forced to cut programs and lay off 37 employees last year to make up for an $11.5-million shortfall caused by a weak economy and revenue losses.

Meanwhile, in Kalamazoo, Keenan said his club has rebounded and is set to open a $2-million indoor facility in October.

But the idea of building a dome has been dumped. "We went to a more traditional steel frame building," he said.

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