GILLIG LLC

CASE STUDY

THE PROJECT

New $100-million manufacturing and assembly plant, warehouse and office complex in Livermore, California.

OUR CLIENT Gillig LLC is the largest transit bus manufacturer in the United States.

BACKGROUND

After nearly 80 years at the same location in Hayward, California, across the bay from San Francisco, Gillig determined it had outgrown its manufacturing and assembly plant. Despite a workforce producing 1,800 buses annually, the backlog on orders had reached nearly a year. Gillig executives wanted to build a new state-of-the-art facility in the Bay Area – specifically rejecting the idea of moving any of its operations outside the United States.

Gillig’s new plant was designed to include a 600,000-square-foot main facility with headquarters office space and additional room for various manufacturing needs and supply storage. The site also included two smaller structures: a 50,000-square-foot building used for fabrication and assembly, and a 27,000 square-foot facility to prepare the buses for delivery.

Given its location, high earthquake resistance – with a seismic design of hospitals, police stations or fire stations – was an essential requirement of the construction project. The finished plant includes 74,000 feet of automated lines, a turnstile for turning and moving a chassis and a leveling station for putting a shell on the bus chassis and lifts to flip the roof assembly.

“Gould & Ratner lawyers provided immense value from the initial contract discussion through the conclusion of our project. Their vast experience proved invaluable as they helped us navigate a very complex and challenging construction environment. They would often be the voice of reason when emotions got high, understood the magnitude of our project and what was at stake. They were always engaged, took ownership and great pride in making sure that our project was a success. In fact, the team continues to check in to see how the business is performing...even two years after our move in.”

-DEREK MAUNUS, CEO, GILLIG LLC

HOW GOULD & RATNER HELPED

Site Acquisition Our real estate lawyers assisted Gillig in finding, vetting and ultimately purchasing a large site in Livermore, about 20 miles away from the existing plant. We counseled on a variety of issues involved in the acquisition, including zoning, permitting, environmental review and financing. We also helped with the planned divestiture of most of the legacy Hayward sites once the new plant was completed.

Construction Project Counsel Our construction team worked with Gillig from the outset of this $100-milion project, advising them on numerous pre-construction issues, including the required earthquake-resistant design. Our lawyers drafted all construction contracts and multiple consultant contracts, mostly in the 2-3 years leading up to groundbreaking in 2016.

Once construction began in the fall of 2016, so did the rains caused by a strong El Niño. In fact, construction continued during the wettest winter in Northern California in 122 years, occasionally causing delays and other challenges. Our lawyers assisted in helping Gillig manage these delay issues, including reviewing change orders and counseling on other project issues. Construction was completed in June 2017.

CLAIMS MANAGEMENT & ADMINISTRATION

Our team assisted in identifying and outlining claims resulting from defective or incomplete construction and prepared the requisite notices to the general contractor regarding those claims. We assumed the primary role in the selection and vetting of experts in each area of disputed work and partnered with those experts in the preparation of reports.

To avoid protracted and expensive litigation, we represented Gillig in private mediation proceedings and, pursuant to our contract drafting, were able to compel multiple parties to participate in a single mediation, saving substantial costs and avoiding inconsistent results. We were able to successfully resolve the disputes in mediation on terms favorable to Gillig.

FUTURE PLANS

Gillig is already planning a possible future expansion of its operations near the Livermore site. Our lawyers are advising them on a variety of options that could involve additional land acquisition and construction projects.