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Palladium contractors to pay $5.3M to settle suit

November 19, 2014
Aerial view of Palladium, 2014

The Carmel Redevelopment Commission is headed for a $5.3 million payday after agreeing to settle a lawsuit over defects found in the structural steel web supporting the Palladium’s distinctive domed roof.

Commission members voted 3-0 Wednesday to let Executive Director Corrie Meyer and commission President Bill Hammer finalize the deal, struck Friday during a daylong mediation session with defendant Steel Supply & Engineering Co.

(Earlier Wednesday, IBJ reported that a settlement was pending.)

Michigan-based Steel Supply agreed to pay nearly $2.8 million and forfeit $750,000 in so-called retainage funds the CRC held back during construction, Meyer said.

Subcontractor and co-defendant Creviston Engineering of Muncie will contribute $800,000, she said.

The remaining $1 million of the settlement total comes from previous deals with two Palladium contractors not named in the 2011 lawsuit: Indianapolis-based engineer of record Lynch, Harrison & Brumleve Inc. and project manager Shiel Sexton Corp.

Rips in the structural steel discovered during construction of the $119 million concert hall halted the project for three months in 2009 amid concerns over the structural integrity of the building.

The CRC filed suit, saying Steel Supply should have reinforced the web connections. Steel Supply blamed a faulty design.

Resolving the lawsuit will eliminate one of the clouds hanging over the CRC, putting an end to Palladium litigation. Earlier this year, the commission agreed to settle two contractors’ claims for a total of $1.3 million.

The settlement also will give the CRC some wiggle room in its budget, freeing up much-needed cash for projects that were suspended or reevaluated during the economic downturn: additional repairs to the Palladium dome, landscaping at the Palladium, and improvements to the public courtyard at Sophia Square on Main Street.

Meyer said the commission will assess its priorities before allocating the settlement proceeds. And shoring up the Palladium roof will be at the top of the list.

“Obviously, we want to make sure the building will continue to be safe for another 100 years,” she said.

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