Bankrupt Martin pool contractor sues Town of North Hempstead

Teri West
Kayla Spernacka, from New Hyde Park, won a raffle to be the first one down the new water slide at Clinton G. Martin Pool during its 2018 opening. (Photo by Rebecca Klar)

The contractor that renovated the Town of North Hempstead’s Clinton G. Martin pool has sued the town, seeking damages in the amount the company says the town owes it for completed work.

Gramercy Group filed the lawsuit in federal bankruptcy court July 3 after declaring bankruptcy May 17.

The complaint chronicles the contractor’s experience working with the town from when it was awarded the initial contract of $20.7 million.

Upon starting the renovation, the contractor encountered what the document describes as shortcomings in the contract that caused delays and extra expense and work. It ends with its current situation in which the town is withholding $1.3 million for construction issues the town says Gramercy failed to address. That is in addition to about $1.5 million that Gramercy Group says the town has not paid.

Gramercy Group is seeking more than $2.8 million in total.

“The town has refused to meet in good faith to negotiate any payment, whether for contract balance, change order work, or otherwise,” the complaint says.

It was disappointing that the conversation had to become a lawsuit, said Gramercy Group’s attorney, Michael McKenna.

“The positions that they were taking were to me indefensible, and we had no choice but to proceed in this manner,” he said.

The town has not yet responded to Gramercy Group about the complaint because the time period to do so has not yet expired, said spokesperson Carole Troterre.

In its bankruptcy filing, Gramercy Group is a debtor-in-possession and not liquidating, which allows it to collect debts, McKenna said.

In May, the attorney said it was a combination of the Town of North Hempstead’s unpaid expenses and an “adverse judgment” in another lawsuit that caused the bankruptcy.

The complaint elaborates on what Gramercy Groups says were omissions in the contract from the start. One example was steel needed to complete the bathhouse that was never in the contract, it says.

“Gramercy was then furnished with new drawings that detailed the additional steel work,” the complaint says. “The steel then had to be ordered and the additional work performed. This was at additional cost to Gramercy and had a three-week time impact for which Gramercy is entitled to additional time and compensation.”

The town also consistently added new components to the renovation that were not included in the original contract, according to the complaint. Those led to the project falling behind schedule, it says.

“The town’s requests that Gramercy perform additional work continued right up to the time of the pool opening,” the complaint says. “Of further example: just prior to the pool opening, the town decided to remove an already-completed concrete planter at the pool’s entrance. The planter, which was constructed per the contract plans, was being removed because the town deemed it ‘was not aesthetically pleasing.’”

Months after the pool opened the town still had changes it wanted made that it outlined in a November 2018 letter that said the project components were incomplete, according to the complaint.

One of those projects was for a gravity overflow system that the contract had asked to have demolished. The town then sent plans for the system in February 2019.

“The town took the position that it was part of Gramercy’s original scope of work and had demanded Gramercy to perform the work at no additional cost,” the complaint says. “Gramercy has and will continue to refuse to perform the work.”

There is an overflow system in place currently that would only pose a risk if a series of issues were to arise, including a power outage, generator breakdown or sump pump breakdown, McKenna said.

Much of what the complaint alleges arose previously in letter correspondences between Gramercy Group and the town. The town sent a letter May 8 to the company saying that it intended to declare the contractor in default for having outstanding work.

Among Gramercy Group’s responses was a letter signed by the company’s president, Vincent Parziale,which goes into the project issues described in the complaint.

McKenna said he anticipates the lawsuit will move more quickly than if it had not been filed in bankruptcy court.

“I expect that this will start to move rather rapidly, but the town hasn’t gotten to the time where it has to respond yet to the complaint,” he said.

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