Rejected bidder cries foul over demolition of Keystone Towers

June 28, 2011

A New York-based company is upset that the city of Indianapolis did not award it the contract to demolish the vacant Keystone Towers apartment complex even though it submitted the lowest bid.

Titan Wrecking & Environmental LLC of Buffalo submitted a bid of $571,621—more than $255,000 lower than the winning bid of $827,000 from Indianapolis-based Denney Excavating.

Problem is, Titan Wrecking failed to provide necessary information, specifically a financial statement with its paperwork, disqualifying it from the bid process.

But the company’s managing partner, Frank Bodami, contends he later offered to provide a financial statement to the city and was rejected. He further argues that Indiana law allows municipalities to waive such “formalities.”

“I mentioned to [city officials] that it seemed to be a formality, and that $250,000 seemed to be a lot of money for taxpayers,” Bodami said. “But they rejected that.”

Denney Excavating plans to implode the towers within 120 days, the city announced Monday.

The city is funding the demolition project with $8 million in federal housing dollars as part of the Neighborhood Stabilization Program. In addition to demolishing Keystone Towers, the money will go toward tearing down the long-vacant Winona Hospital and rental housing projects in a few parts of the city.

Denney’s bid was one of 10 submitted for the project that came in below the budgeted $2 million. The bids were reviewed by three city offices: the Department of Metropolitan Development, the Office of Corporation Counsel, and the Department of Minority and Women Business Development.

Samantha Karn, the city’s corporation counsel, said the city occasionally receives incomplete bids, but it never offers an offending company the opportunity to correct mistakes even if it would mean saving public money.

Karn acknowledged state law does give municipalities the right to allow bidders to correct errors, but only if it doesn’t give them an unfair advantage. In this instance, Titan Wrecking also failed to submit a demolition plan, which further disqualified the company, she said.

“Definitely there are times when the city gets hurt because the bidder doesn’t follow the requirements,” Karn said. “Believe me, we think that’s unfortunate, too.”

After the demolition, the city will explore redeveloping the site. Any new projects must include mixed-income rental housing by the rules of the federal grant used to demolish the 15-story complex.

Located northeast of the Indiana State Fairgrounds near the intersection of Keystone Avenue and Binford Boulevard, Keystone Towers has been vacant more than 10 years.

The apartment complex, built by local developer George Ginger in 1974 as the VIP Center, originally included apartment and office components and was intended to be a crown jewel on the midtown Keystone Avenue corridor. However, leasing problems hampered the project from the beginning and the office space was eventually converted into apartments.

Denney Excavating, founded in 1990, has handled numerous local demolitions, including the Penn Building and the Larue Carter Memorial Hospital buildings.




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