Problems deepen at Baybutt construction projects
By Susan Smallheer
Staff Writer | January 10,2013
BRATTLEBORO — Financial problems continue to mount for Baybutt Construction Co., as the state of Vermont declared Baybutt in default Wednesday of its $2.6 million construction contract for renovation of the state office building in Brattleboro, clearing the way for its bond company to come in and take over the stalled renovation.
Robert Rea, director of facilities for the Vermont Department of Buildings and General Services, said that Baybutt had run into financial trouble this fall, if not earlier.
“We started to see red flags in September,” Rea said. Subcontractors have not been paid, he said, and have refused to work.
While some work has continued at the Brattleboro renovation, he said only a handful of workers had been on the job recently, when there should have been about 40.
The state’s action could be repeated in Rockingham, where the Rockingham Select Board is slated to meet in an emergency session this afternoon to discuss the stalled renovation project at the Rockingham Free Public Library. Baybutt is the general contractor on the $2.9 million renovation.
But unlike the state of Vermont, Rockingham does not have a valid payment and performance bond, according to town officials.
The town attorney, Stephen Ankuda of Springfield, said that Rockingham did not have a performance and payment bond from Baybutt, despite paying $21,000 for it earlier in the year.
The lack of a payment and performance bond has left the town in an unenviable position, Ankuda said.
Rockingham Municipal Manager Tim Cullenen said the town had paid for the payment and performance bond, but it had “dropped through the cracks” and library and town officials didn’t notice it was not in place. The library is owned by the town, but the library trustees run the library, which is funded by voters on Town Meeting Day.
Cullenen said that the town had the option of pursuing legal action against Baybutt.
According to Ankuda, neither the town nor the library trustees had an attorney review the contract with Baybutt, something Ankuda said was not unusual.
Typically, a performance and payment bond costs between 2 and 3 percent of the total construction project, said Rea, the state official.
Ankuda said that Baybutt, which is based in Keene, N.H., had assured town officials and its architect on the library project that it had the payment and performance bonds. But sometime in November or early December, the town discovered the bond did not exist.
“Baybutt said it had been an oversight and offered to refund the $21,000,” Ankuda said. The town did not take Baybutt up on its offer, he said.
Ankuda said the town did not have a clerk of the works on the library project, but did have a management contract with the project’s architect, SMP Architecture of Concord, N.H.
Liens totalling $466,000 have been filed in connection with the library renovation project, and town officials said Baybutt was paid for those bills, but did not pay contractors.
As for the state office building in Brattleboro, Rea said that the bonding company had come on board in the past week or so.
“They want to minimize their losses and their exposure. They are going to try to utilize the subcontractors already working. We would like that to happen as well,” Rea said, noting that the Brattleboro project was about 40 percent complete, and had been expected to be ready for state employees to move back in by the end of March.
The state is paying about $35,000 a month for rental offices for the Department of Health, the Department of Labor and the Agency of Human Services, while the offices were being renovated.
The state office building is adjacent to the Brattleboro Municipal Center.
Baybutt has run into problems at six different projects, said Tom Appel of New England Management Co., who managed another large Baybutt construction project — the new Brattleboro Food Co-op and housing by the Windham Windsor Housing Trust.
Appel said that it was normal that there was some “tension” between the general contractor and subcontractors on any major construction project, but he said the food coop became concerned last year with the amount of complaints.
Appel said the new food co-op, which is “98 percent complete,” and has been open to the public since June, still had a punch list of minor issues that needed to be completed by Baybutt before it would get its final payment.
But Appel said that the food co-op project still had withheld 5 percent of the total cost of the project, waiting for the final issues to be resolved.
Appel said it appeared that Baybutt had run into problems at about six large construction projects — two in Brattleboro, one in Rockingham, two in Keene and one in Nantucket.
Rea said the state had worked with Baybutt before on a large construction project at Johnston State College about 15 years ago, and the firm had done excellent work.
“But they say the doors are locked at its office in Keene and no one was there. It doesn’t look good,” said Rea.
Baybutt officials couldn’t be reached for comment Wednesday.
According to published reports in the Keene Sentinel, Baybutt’s corporate offices have been foreclosed on and are due to be auctioned off on Feb. 1, along with a small ski area, Granite Gorge Ski Area, it owns outside Keene.