Belmont Firms File for Binding Arbitration; Developer, Contractor, Architect Seek Resolution on Development Contract.

Business Editors

LOS ANGELES--(BUSINESS WIRE)--April 19, 2000

Frustrated by the Los Angeles Unified School District's failure to act, a group of construction and architecture firms have filed for binding arbitration to resolve contract issues related to the Belmont Learning Center project.

"The school district has made a public show of abandoning the project, but has refused to address any of the contractual and legal issues that flow from that decision," said Kenneth J. Reizes, project executive for Temple Beaudry Partners LLC. "Our only recourse is to seek binding arbitration under the dispute resolution clause of our contract."

The demand for arbitration seeks monetary damages and other relief. It was filed Tuesday on behalf of Temple Beaudry Partners LLC; Turner/Kajima; and McLarand Vasquez & Partners Inc.

Earlier attempts at mediation failed because the school district "refused to let anyone with decision making authority participate," Reizes said.

The contract between Temple Beaudry Partners LLC and the Los Angeles Unified School District contains a binding arbitration clause that requires a hearing within 60 days of the arbitration demand, and a decision within 14 days after the hearing.

"We look forward to moving this matter quickly through arbitration," Reizes said. "We expect a ruling that we have fully and faithfully met all of our contractual obligations to the Los Angeles Unified School District."

Specifically, the demand for arbitration seeks:

-- Payment of approximately $20 million for damages "which are

continuing and will be determined according to proof";

-- Declaratory relief affirming that the Disposition and

Development Agreement has been terminated;

-- Interest, attorneys' fees and costs;

-- Other relief as appropriate;

The school district has failed to make any payments to contractors since October 1999, even for work that was authorized and completed before the Belmont project was shut down.

The district suspended work on the Belmont project in November, citing environmental issues that were outside the scope of work and responsibility of Temple Beaudry Partners LLC. The Board of Education voted in January to abandon Belmont as a school site, expressing concern about environmental conditions at the site.

The district directed Temple Beaudry Partners LLC to vacate the construction site, but has refused to take any formal action on the developer's contract - which specifically excluded Temple Beaudry Partners LLC from responsibility for environmental issues.

"We were not involved in acquiring the Belmont property, evaluating its suitability for a high school or deciding to build a school there. Those decisions were made long before the developer was hired," Reizes said.

"When we were selected to build the project, the school district retained all responsibility for environmental issues," Reizes said. "That reduced the project's total cost - but it also required the district to indemnify Temple Beaudry Partners LLC on all environmental matters."