Landfill Investigation: State Sues Developer Over ‘$20 Million Blunder’
Wednesday, September 08, 2010
A state agency is accusing a Warwick developer of building a tipping facility at the state landfill that was completed behind schedule and cost more than promised in a lawsuit filed in Providence County Superior Court last Friday.
In the suit, the Rhode Island Resource Recovery Corporation claims that the “size and costs” for the facility “spiraled out of control into a nearly $20 million blunder.” The facility, which was built by O. Ahlborg & Sons, Inc.—now the Ahlborg Construction Corporation—is not even being used for its original purpose and is scheduled for demolition.
Resource Recovery says the building is “typical of the epidemic of corruption, mismanagement, and wrongdoing rampant at RIRRC” and claims the company was “all too happy to take advantage of these circumstances and did so at an enormous cost to RIRRC.”
GET THE LATEST BREAKING NEWS HERE -- SIGN UP FOR GOLOCAL FREE DAILY EBLASTThe complaint is the latest in a string of lawsuits stemming from the mismanagement of the landfill, which cost taxpayers $75 million, according to a 2009 state audit. GoLocalProv previously reported that Resource Recovery has sued two of its auditors, a money manager, property owners who allegedly sold it over-priced and contaminated land, and an insurance company—all in an attempt to recover some of that lost $75 million.
The latest suit documents how the costs for the tipping facility skyrocketed over a short period. In February 2001, Ahlborg estimated the 36,000-square foot building would cost $8 million to $9 million. But about seven months later, the company revised that figure, promising Resource Recovery it would cap costs at $11.97 million. When the project was all said and done—nearly five months behind schedule—the tab came in at more than $13.7 million, according to the state audit.
That audit concluded that the overall cost of the facility—not counting the value of the land and certain other costs—was approximately $20 million, according to Resource Recovery.
The charges against Ahlborg include obtaining property by false pretenses, giving false documents, bribery, civil conspiracy, fraud or negligent misrepresentation or omission, and breach of fiduciary duty.
Resource Recovery is seeking damages, attorney fees, costs, and expenses, and any other relief the court determines is appropriate.
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