The Parks at Amarillo and Advance Growth Properties v. Optiplan, Inc., et al. Opinion of Gary Abington Sampson, FAIA The Parks at Amarillo and Advance

The Parks at Amarillo and Advance Growth Properties v. Optiplan, Inc., et al.

Opinion of Gary Abington Sampson, FAIA

The Parks at Amarillo and Advance Growth Properties

v.Optiplan, Inc., et al.

Org. Chart Timeline Ice RinksAlleged

DamagesSetco

WebsiteParks

PhotosStonebrook

PhotosSection13160



General Background

Notably, the ice rink at Parks Mall, minor problems with the ice quality notwithstanding, has been in continuous operation since opening in late 2002, performing its intended purpose, earning steady revenue for Parks. I have visited the site during hours of operation and found the ice rink area to be a busy and vibrant area.

Nonetheless, Parks now wants a free new ice rink and a free new HVAC system for the surrounding mall area, which they want someone else, ostensibly including Optiplan, to pay for.



Reliance Upon Consultants and Industry Specialists

• It is common for architects to engage (hire) and to rely upon other consultants to provide design services on projects.

• Commonly, the architect coordinates the architectural services with the other consultant’s services.

• The architect does not “supervise” or “control” the actual design work performed by the other consultants.

• The architect is entitled to rely on the consultants it hires to provide professional services in a competent and non-negligent manner.



Ice Rink Design

• Keith Hitner had designed the Stonebrook ice rink for RPB and AGP and they wanted him to design the ice rink in the Parks Mall project. Hitner proposed and agreed to coordinate the ice rink schematic designs, the formative phase of design, as follows:

“KHA will provide the coordination of all of the above as required for a timely, and successful completion of the project.”



Ice Rink Design

• And Hitner agreed to provide the construction documents for the ice rink, as follows:

“Upon completion of the coordination process KHA will provide complete construction documents to include: dimensioned and noted plans, elevations, and wall sections, reflected ceiling plans, code notes, door schedule, finish schedule, lockset schedule, and specifications as required to construct the facility. All documents will be professionally signed and sealed.”



MEP Engineering

• Architects are licensed to practice architecture and not engineering. Accordingly, when an architect engages an engineer to provide engineering services, as Optiplan engaged DPC to provide MEP/FP engineering services, the architect is entitled to rely upon the sufficiency of the engineering services provided by that engineer related to the assignment. In addition, DPC proposed to provide the following services specifically related to the ice rink:

PROPOSAL E – Ice Rink…3. HVAC for the rink area utilizing dedicated desiccant air conditioning equipment specifically designed for ice rink applications



MEP Engineering

PROPOSAL E – Ice Rink…4. Coordination of services for the ice generation equipment. It is assumed that this equipment will be awarded as a “turn-key” installation and contracted directly to the owner

• These are the MEP design services that Dencopa now claims that Optiplan did not provide. Optiplan was entitled to rely on DPC to provide the services that DPC proposed.



Refrigeration Equipment Design

• Occasionally subcontractors or specialty consultants/subcontractors will provide design services directly to owners, or to owners through the general contractor. Louis/Setco offered to provide free services that included:

“Free services offered to our clients include design coordination of the refrigeration and floor system and construction coordination with the general contractor to ensure the owner receives a quality sheet of ice on time…”

• In addition, Louis/Setco had been negotiating the ice sheet with Tom Hargrove and had proposed a 105 ton system, including a detailed specification, for a price of $605,000 as early as late September 2001. RPB, AGP, Parks or Setco had already decided to put the Ice Rink System out for bids.




• Pedheroski has asserted:“Optiplan had no direct role in the formation of the refrigeration, dehumidification and HVAC specifications or in the review or acceptance of any proposals from the equipment contractors; however, Optiplan’s subcontractors performed these functions on its behalf. Optiplan appears to have responsible (sic) for these functions under its contract… With regard to the engineering services for which Optiplan was responsible, those services failed to meet proper standard of care, For these reasons, Optiplan is responsible for the damages suffered to the Mall owner.”

I agree that Optiplan had no direct role in the formation of the refrigeration, dehumidification and HVAC specifications. It is my opinion tha the services provided by Optiplan, under the teRPB of its contract with Parks for this project, did not cause the damages or impact expense




• I agree that Optiplan had no direct role in the formation of the refrigeration, dehumidification and HVAC specifications. It is my opinion that the services provided by Optiplan, under the teRPB of its contract with Parks for this project, did not cause the damages or impact expense claimed by Parks, for which Ominplan should be responsible. However, to the extent that the claims for damages or impact expense that Parks alleges involve design services or other consulting services provided by engineers or other consultants to Optiplan, or consultants and subcontractors to Parks, then the respective engineer, consultant or subcontractor should be responsible for addressing those allegations.



Betterment or Unjust Enrichment

• What is Betterment?

Betterment costs affect the true value of property. Black’s Law Dictionary defines betterment as

“an improvement put upon a property that enhances its value more than mere replacement, maintenance, or repairs.”

However, when owners are confronted with impact and betterment costs, they frequently do not differerentiate between them and usually feel the design professional should be responsible for both.




• What is Betterment?

The costs for accommodating a change in the work that is essential to complete the project design (betterment) are rightfully the owner’s responsibility. The American legal system upholds this principle because the owner benefits from such work. Nevertheless, owners often struggle with cost increases brought about by such changes, especially when additional required expenditures are discovered toward or after the end of construction of a project when the owner is pressured because their budget has been depleted. The need for reasonable contingencies and the owner’s understanding of the inevitability of changes to designed or constructed work cannot be overemphasized.




• Unjust Enrichment

Further, an owner should not be unjustly enriched by the outcome of a lawsuit. The principle of betterment is involved in many of the ice rink and HVAC environment improvements proposed by Parks and their experts. The design professionals are apparently deemed by Parks to be responsible for a significant portion of the associated costs, including a large percentage of betterment, for each error or omission ostensibly contained in the claims proffered by Parks. To reiterate, if all or a portion of the cost for a particular claim issue involves work or scope that would have been necessary to construct the project, or improvements that Parks has not yet paid for, regardless of whether an alleged error omission had occurred, this work, or betterment, enriches Parks and is their responsibility.




• An essential aspect of the concept of betterment is when a party makes an error and work is installed incorrectly because of the error, impact expense is calculated as the original cost of the incorrect work due to the error plus the cost of removing the original incorrect work. Impact expense does not include the cost of the materials or installation of the new replacement work, or other improvements, which are still the responsibility of the owner. Further, if remedial work to correct errors is required, whether it is reconstructive, or simply added scope, the solution to problem issues must be reasonable in the context of the original project climate.




• Age, Wear and Tear

The Mall and the Ice Rink have been in operation since roughly December 2002. The equipment and facilities that Parks’ experts propose to replace, renovate, upgrade and improve have been in operation for approximately seven years. The affected equipment and facilities are thus used and do not have the same value as new equipment and facilities. Depreciation expense related to the existing equipment and facilities, to account for age, wear and tear is Parks’ responsibility and must be accounted for as betterment, or value received. Parks’ experts have not accounted for the value that Parks has received in the form of depreciation due to age, wear and tear.



Who Wrote Specification Section 13160?

• September 24-27, 2001• Fax from Setco/Scott Smith

– Tom Hargrove – Budget Price Quote of $605,000 (9/25)

– and Ross McCarthy specifying rink size, environment criteria, and 105 ton refrigeration equipment selection (9/27)




• November 15, 2001

Section 13160 – Ice Rink System; ice rink size (85’ x 200’), environment criteria (Ambient 91 F Dry Bulb; 77 F Wet Bulb), and minimum 104 ton refrigeration equipment specification

• December 3, 2001

Section 13160 – Ice Rink System forwarded to Ostrander (VCC) by Garland (email); ice rink size (85’ x 200’), environment criteria (Ambient 91 F Dry Bulb; 77 F Wet Bulb), and minimum 104 ton refrigeration equipment specification; specification noted as provided by Hitner.




• January 24, 2002: Hitner email to Garfield; analysis of Setco bid

One other item that Setco included in their proposal which I did not specify but should have are permit drawings, signed and sealed by an engineer licensed in the State of Texas . . .




• The reasonable conclusion is that Hitner authored specification 13160. Hitner edited and issued the Ice Rink System specification, which he apparently based, at least in part, upon information he obtained from Setco, and upon which Setco based their bid. What Setco overlooked, perhaps because they provided the template for the specification, as well as their pre-bid involvement in negotiating a 105 (ostensibly 104 tons) ton system with Hargrove and VCC in tying to get the job, was that section 13160, paragraph 2.2 Equipment, as issued by Hitner, was a minimum equipment standard:

• 2.2 EQUIPMENTA. Manufacturers and equipment specified below are for the purpose of setting a minimum standard with respect to equipment capacity and quality and to provide specified performance of the ice rink system.



Conclusions of Gary Abington Sampson, FAIA

Relative to the issues in this report:• It is my opinion that the professional services provided by

Optiplan met the standard of professional care established in its contract with Parks for the design of the Parks Mall Expansion and Skating Rink at the time the design services were preformed.

• It is my opinion that the professional services provided by Optiplan met the standard of professional care expected of practicing architects on a project like the Parks Mall Expansion and Skating Rink at the time the architectural services were performed.

Gary A. Sampson, FAIA reserves the right to amend the comments, positions and opinions presented in this report in the event other pertinent reports, amendments, documents, depositions or evidence become known, which impact the comments or opinions contained herein.

Documents

The Parks at Amarillo and Advance Growth Properties v. Optiplan, Inc., et al. Opinion of Gary Abington Sampson, FAIA The Parks at Amarillo and Advance