County, contractor settle to restart Valley Medical construction

Santa Clara County has reached an agreement settling a dispute with Turner Construction Company over a more than $300 million hospital project in San Jose, which is now expected to be completed next year, county officials announced Friday.

The project at Santa Clara Valley Medical Center off of South Bascom and Moorpark avenues was initially scheduled to be finished in 2012.

About $85 million will be added to the bill for the project, now anticipated to be complete by mid-2017, according to county officials.

As part of the agreement, Turner Construction’s CEO Peter Davoren will be directly involved in the project and there will be new on-site managers, county officials said.

In 2008, voters approved funds for the project, which is expected to provide 168 rooms at a new facility that will meet current seismic safety standards. State law requires all hospitals to meet current seismic safety standards by 2030, county officials said.

The county had terminated its contract with the New York-based construction company in September, citing numerous issues including delays and safety concerns.

The county also filed a lawsuit against Turner Construction in September that alleged breach of contract and negligence in project operations, according to county officials.

In 2014, a construction worker was nearly killed during a steam explosion while inside an underground pipe at the North Utility Loop, which will provide water and other services to the medical center’s facilities, county officials said.

The county released a nearly five-minute video of the explosion.

The worker barely escaped and didn’t suffer any burns, county officials said.

Turner Construction officials in September said the project was 90 percent complete and they had received 850 change orders from the county on the project, according to county officials.

After the contract was terminated in September, the county was in talks with other contractors to finish the work and called on construction firm The Boldt Company to conduct an independent analysis of the project, according to county officials.

The company, based in Appleton, Wisconsin, indicated another $126 million would be needed to cover the rest of the project, according to county officials.

The estimate doesn’t include a resolution of pending claims made by Turner and subcontractors or the cost of potential litigation, estimated in the millions of dollars, county officials said.

The agreement settles past litigation and claims between both sides, according to county officials.

County Executive Jeff Smith said in a statement:

“This agreement is good for patients and taxpayers. … Over the past month, Turner’s CEO, Peter Davoren, approached the County with a firm commitment on completion costs as well as a collaborative approach to finish the project in a reasonable time period. We now have a budget and timeline we can count on.”

Medical center CEO Paul Lorenz said in a statement:

“We are eager to see the Bed Building finished as soon as possible. … Bringing this new, modern facility on line will help improve the patient care of our expectant mothers, physical rehabilitation patients and burn center patients.”

Requests for comment from Turner Construction were not immediately returned.