Robotic Parking Inc., the Florida-based engineering firm hired to install the garage's automated features, took another hit on Tuesday, June 11 when, according to two parking commissioners, the garage failed a new test. The two members of the Hoboken Parking Authority (HPA) board, who spoke on the condition of anonymity, said that Robotic agreed to run a real-life scenario test that was proposed by the HPA. The test was designed to prove that the system was complete and ready for customer use.
According to the officials, the test required Robotic to use all four parking bays simultaneously, three to store cars and one to retrieve cars. All requests were made of the system within 15 seconds.
The officials said that the system halted and failed, causing the cars to stop in place. The system had to be manually reset, and Robotic could not complete the test, they said.
As of press time, Robotic had not returned multiple phone calls.
According to HPA officials, Robotic has since agreed to fix the system and conduct real car testing before the HPA performs any further tests on the building.
Investigation presses on
Two weeks ago, Mayor David Roberts announced that he launched an independent investigation into the situation surrounding the garage delays. Police Chief Carmen LaBruno and Professor Constantin Chassapis, director of the Department of Mechanical Engineering at Stevens Institute of Technology, have been leading the fact-finding mission on the 916 garage.
Mayor David Roberts said Thursday that the HPA and the contractors have been reluctant to provide documents necessary to complete the investigation. That has prompted Police Chief LaBruno to contact the Hudson County Prosecutor's office.
According to one HPA official, the agency then received subpoenas from the county prosecutors to turn over meeting minutes, contracts and on other documents pertaining to 916 Garden.
"This is a government agency gone awry," said Mayor Roberts, who came into office last July, Tuesday.
This past Wednesday, LaBruno updated the City Council on the investigation's progress during a special session that was closed to the public. While the chief would not comment on the investigation afterward, the mayor did give several hints Thursday about its progress.
"There are several issues that are very concerning," said Roberts. "We're pursuing those leads using every resource that we have at our disposal."
The mayor added that despite major problems, he has guarded optimism that the troubled garage will eventually open. "Looking at the very preliminary reports that [Chief LaBruno has provided] it appears that the garage has the potential of opening, but it will never meet its original specifications," he said.
According to Roberts, a report available to the public could be forthcoming as early as next week. Outgoing commissioner explains the garage situation
Hoboken Parking Authority Commissioner Daniel DeCavaignac's last day on the seven-member volunteer board is June 30. After nearly one year on the body, DeCavaignac has decided to call it quits, citing differences with Mayor David Roberts (who appointed him) and the City Council when it comes to how to facilitate parking in the city. He has emphatically stated that the problems at 916 Garden are not why he is resigning.
In his time on the board, DeCavaignac, a professional technical project manager in the private sector, served as the chairman of the board's Facilities Sub-Committee. Recently, he supplied the Reporter with a detailed analysis of the situation at 916 Garden St.
"The mayor's investigation of the 916 garage has political merit, but it is unlikely to accomplish or discover anything significant because the problems are neither criminal nor mechanical," DeCavaignac said. "The commission is made up of the police and a mechanical engineer professor from Stevens and does not include a lawyer, a computer engineer, and a construction project manager."
In his letter, DeCavaignac said that a certain amount of background is needed to understand the mess that the HPA is in now.
As background, the original construction contract for the project was declared in default almost two years ago because the master contractor, Belcor, and the subcontractor, Robotic, could not work together to finish the garage. Both companies blamed each other for problems in the garage.
Fortunately for the HPA, the HPA had bought a $6.3 million performance bond to ensure the completion of the project.
After Belcor and Robotic were fired, the HPA entered into negotiations with the insurance company, Lumberman's Mutual Casualty Company of Lyndhurst. On Sept. 10, 2001, a "Take Over Agreement" between the HPA and the surety went into effect. Under the agreement, the insurance company was given 180 days to complete the project. Lumberman's hired Robotic to finish the job they had started. Robotic is owned by a businessman who had helped build automatic garages in Germany.
The 180-day completion period ended this past April 17, 2002. The HPA denied a request for a 30-day extension. Thus, presently, according to DeCavaignac, Lumberman's is being penalized $1,000 per business day in liquidated damages.
DeCavaignac added that is imperative that the Hoboken taxpayer understands that 916 Garden is funded by public bond, issued by the HPA and guaranteed by the city. The $6.1 million bond was part of $36 million in bonds for Parking Authority projects (including the St. Mary garage) voted on by the City Council in 2000. No tax revenues have yet been spent on this project, as, according to DeCavaignac, the loan interest is paid by the HPA out of operational revenues from municipal garages on Hudson Street and parking meter revenue. Repayment of the bond is structured to occur over the next 10 years.
"Currently, the HPA pays about $25,000 per month in interest against no revenue," said DeCavaignac. "It is part of the reason that the HPA is cash poor and is largely responsible for the cost overruns on the project." He added that the only new HPA spending for the project has been on legal work. Lumberman's is currently responsible for paying Robotic.
What can the HPA do now?
According to DeCavaignac, the HPA has two choices. It can stop the work and declare a breach of contract. That, he said, would set the stage for a large legal battle with Lumberman's to make the payment to the HPA under the performance bond. The amount payable to the HPA would be $6.3 million less than whatever has been spent by Lumberman's to pay Robotic for work on the garage since Sept 10.
The HPA could then sell the land to a private developer or attempt to hire new vendors.
Or the HPA could allow Lumberman's to continue work while accruing $1,000-per-day damages.
In his analysis, DeCavaignac said that sticking with surety might be the most viable option. "Declaring breach now would doom the garage forever," said DeCavaignac. "It would take years to litigate and collect payment under the bond." He added that since all the automation software and hardware is the intellectual property of Robotic, all automation systems in the building would have to be removed and any new contractor would have to start from scratch.
Having its cake and eating it, too
DeCavaignac said that there are a couple of advantages to allowing the insurance company to finish the work. "The current vendors are contracted, engaged and committed to the project," he said. "It should open sooner and for less money."
But more importantly, he said that if the HPA stays with Lumberman's and Robotic, the HPA might be able to receive a working garage and collect the $6.3 million. According the garage's contract and bond guarantee, once open, the garage must be fully functioning 99.5 percent of the time. That means that all systems must meet the contract standard for all but 40 hours over the first 3,760 contiguous hours of operation.
According to DeCavaignac, there is no way that the garage can meet that requirement in the way it is defined in the contract.
"It is unlikely that the garage will ever meet contract specifications but should function in a manner acceptable for regular operation," he said. "Under the bond, the HPA can keep the garage and declare breach. It is a delicate legal balancing act that may suffer irreparably from outside interference."
DeCavaignac concluded that while the mayor's investigation might be well-intentioned it could have the possibility of doing more harm then good.
"I know the delays at 916 are embarrassing to the mayor," he said. "But poking around with big feet may cost the HPA the value of the bond and accomplish little else. Although it is very tempting to re-negotiate and repair the problems in the contract specification that are stumbling blocks to the opening of the garage, it would invalidate the bond." - Tom Jennemann