OC Streetcar Project Mediation Results in $50 Million Payment to Walsh Construction
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TL;DR
- Mediation settled some claims between Walsh Construction and Orange County over the OC Streetcar project.
- Walsh will receive a payment of nearly $50 million.
- Remaining claims are postponed until project completion to allow full cost accounting.
- A pre-paid allowance was created to address further disputes.
Overview
Walsh Construction and the Orange County Transportation Authority (OCTA) reached a mediated settlement of certain claims related to the OC Streetcar light rail construction project in California. The parties agreed to a $50 million payment to Walsh, with the trial on any outstanding claims postponed until project completion.
What Happened
Walsh Construction filed a lawsuit against OCTA in 2022, alleging breach of contract and claiming it was owed additional money due to issues such as an incomplete design, differing site conditions, and coordination failures.
Mediation efforts between the contractor and the authority led to a partial settlement, resulting in an agreement for an additional payment of nearly $50 million to Walsh.
The settlement also included a pre-paid allowance to address and resolve future disputes between the parties.
The parties have requested the California state court to postpone the trial on any unsettled claims until the project is finished so full project costs can be determined.
Context
The OC Streetcar project involves building a 4.15-mile light rail line between Santa Ana and Garden Grove, California, with an initial contract awarded to Walsh Construction in 2018 for $220.5 million.
Subsequent changes and extensions increased the project cost to $400 million, and disputes arose regarding delays and design issues.
The mediated settlement represents a move toward resolving longstanding disputes ahead of project completion, with cooperation indicated between the parties.
Why It Matters
- The settlement secures significant payment for the contractor and avoids immediate litigation on some claims.
- Postponing the trial on unresolved claims allows comprehensive cost determination and may facilitate further negotiated resolutions.