Build On This!

Cleveland City Council is likely to renew the current residential tax abatement program, rejecting Mayor Jackson's proposal to limit the term of the abatements, reports the Plain Dealer. The Mayor favors reducing most abatements to seven years from 15, with 12 year abatements for environmentally-friendly design. Many developers believe the abatement program is essential to building new housing in Cleveland.

Construction law and business litigation attorney Mark F. Craig reports that the Ohio Supreme Court upholds a “no damages for delay” clause in Dugan & Meyers Constr. Co., Inc. v. Ohio Dept. of Adm. Servs., 2007-Ohio-1687. Plaintiff Dugan & Meyers (“D&M”) was terminated on a public project at the Ohio State University and was assessed liquidated damages for 188 days of delay in completion, apportioned between D&M and three subcontractors.

D&M brought suit in the Court of Claims to recover its cost overruns, alleging that the additional costs were due to inaccurate plans and specifications provided by the public owner. The referee in the Court of Claims agreed, finding that under the 1918 U.S. Supreme Court decision, Spearin v. United States, D&M was entitled to rely on the accuracy of owner-provided plans and specifications. The Court of Claims agreed with the referee’s recommendations and granted judgment in favor of D&M.

By James Simon and Donald Leach

In late 2006, the Ohio General Assembly passed H.B. 694, a sweeping reform of Ohio’s campaign finance laws that affects all public contractors and design professionals. This new law severely constrains public contractors’ and design professionals’ ability to make political contributions to officeholders that award bid or unbid public contracts valued over $500. Its impact is not limited to construction related contracts as affected public contracts include all those let by the state, state agencies and political subdivisions, including local governments and appointed boards, agencies and commissions. H.B. 694 imposes harsh sanctions, including criminal prosecution and contract rescission, for contractors that violate its limits.

The provisions of H.B. 694 affect all contributions made after January 1, 2007. Under the new law an officeholder (and all boards, agencies or commissions the officeholder appoints) cannot award a public contract if the officeholder received campaign contributions exceeding $1,000 during the preceding two years from an individual owner, member, partner, 20% shareholder or professional corporation shareholder of a public contractor. The limit includes contributions by owners’ spouses and minor children.