Winston-Salem, NC -- The City of Winston-Salem has started the process to remove Farley Associates from a fire station construction project after the contractor fell behind on work and failed to pay subcontractors.
Assistant City Manager Greg Turner told WFMY News 2 the city has exercised an option in its contract to release Farley Associates from the project with seven days notice. The city wrote a letter providing that notice on Friday evening.
Winston-Salem hired Farley Associates as the general contractor for construction of Fire Station #19. But three months ago, the city got word of payment problems.
"We were approached by several of the subcontractors working on the project that they were having trouble getting payments from the prime, Farley," Turner told WFMY News 2 in an exclusive interview Friday. He estimated that a couple of dozen subcontractors weren't getting paid.
"Obviously when a sub is not being paid, they get to the point where they say, 'We're going to have to pull off the job,'" Turner said.
The Hartford, the project's bonding and surety agency, started paying subcontractors and work has continued. Turner says the project is about 65 percent complete and that it will be up to The Hartford to now select another contractor to finish the job. There was no immediate timetable on when that could happen.
If the story sounds familiar, it is. Construction at McNair Elementary School in Guilford County fell behind when Farley failed to pay subcontractors -- and the opening of the school has been delayed. Guilford County Schools removed Farley from that project last week.
The school system's attorney, Arty Bolick, told WFMY News 2 on Tuesday that he is working to finalize a takeover agreement with The Hartford to allow a new contractor to take over the McNair project. The new contractor is likely to be JE Dunn -- one of the largest construction companies in the country. Once the takeover agreement is finalized, JE Dunn will evaluate the status of the McNair project and lay out a timeline on when it can be finished. Still, there is no timetable for when the school could be completed.
The mess won't put taxpayer dollars at risk, though. Because The Hartford was Farley's bonding agent, it will have to pick up any overrun costs on both projects. And both the City of Winston-Salem and Guilford County Schools could be able to seek liquidated damages of $2,000 per day for each day past their respective project's originally agreed-upon completion date.
Special Section: McNair Elementary School Saga
WFMY News 2 uncovered exclusive details Monday that Farley's problems extend beyond state lines. The Fort Mill (South Carolina) School District said it has three Farley projects that are likely to move in to default.
WFMY News 2