The City of Atlanta said it has settled lawsuits over the firing of the first design team on the international terminal project at Hartsfield-Jackson International Airport, resolving a longrunning dispute over a run-up in costs for the $1.4 billion terminal.
In the settlement, the city will get a $10 million payment from Lexington Insurance Co., which insured the design team as part of a city insurance program.
But the city will also pay out $1.25 million to the design team to settle the team's claim that it performed extra design work. The team included Leo A Daly Co., Khafra Engineering Consultants Inc., Browder + LeGuizamon and Associates, and Anthony C. Baker Architects and Planners P.C.
The city said it reached the settlement during mediation with the terminal design team and Lexington Insurance earlier this month, and all parties will dismiss their lawsuits.
"It's very rare, certainly in my tenure here, where we're receiving money rather than giving money," said city attorney Cathy Hampton at a city council meeting where the council approved a resolution authorizing the settlement.
The city also agreed to convert the contract termination to a "termination for convenience," which Leo A Daly senior vice president John Whisler said "removes any stigma" from his firm. Whisler said "nobody is at fault under this arrangement."
"There were suits and counter-suits in both directions. All that was weighed in deciding what was financially acceptable to all the parties, including the city of Atlanta," Whisler said.
The dispute over the international terminal design contract began in 2005 when the city fired the design team, saying the design plans exceeded the budget by at least $140 million. The terminal design team filed a $60 million lawsuit against the city, and the city sought damages against the terminal design team for about $120 million for redesign costs and other cost increases.
According to early estimates, the international terminal was expected to cost about $688 million and open in 2006. But over the years, the cost has escalated and the opening date was pushed back multiple times.
In 2005, then-airport manager Ben DeCosta decided to fire the design team after learning that the international terminal as designed would exceed the budget by at least $140 million. A new design team was hired for the project.
In recent years, the cost has increased further. The international terminal, including 12 new gates, is now expected to cost about $1.4 billion and is scheduled to open next spring.
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