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Tampa Housing Authority fires firm whose job was to rescue Tempo at Encore project

The Tampa Housing Authority has fired Berkley Surety Group and Tron Construction for problems and slow work on the Tempo at Encore, a $25.6 million apartment project.
The Tampa Housing Authority has fired Berkley Surety Group and Tron Construction for problems and slow work on the Tempo at Encore, a $25.6 million apartment project.
Published Jun. 1, 2017

TAMPA — For the second time in a year, the construction site of an unfinished $25.6 million Tampa apartment complex sat deserted Wednesday after the Tampa Housing Authority fired the insurance company charged with rescuing the troubled project.

The Housing Authority and its development partner announced they were terminating their contract with Berkley Surety Group and its contractor Tron Construction, bringing to a halt work on the Tempo at Encore, a seven-story building on the edge of downtown Tampa.

As underwriter of the project, Berkley took over construction after the Housing Authority fired the original contractor, the Siltek Group, one year ago. Against the wishes of the Housing Authority, however, Berkley hired Tron Construction, a new firm run by Siltek's owners.

Construction workers were told at 10 a.m. Wednesday to leave the site, which was then secured by security staff.

Housing Authority officials said it was obvious the building was not on track for its scheduled August opening, and they doubted it would be finished this year. Part of the problem was that Tron did not have enough workers on site, said Leroy Moore, the agency's chief operating officer.

"I counted 30 people on site," Moore said "There should be 300 people on site at this stage of construction."

There were plenty of other problems with Tron's work, Moore said. Windows were installed incorrectly, leaving the building prone to leaks. A separate clubhouse/office building was not built to specifications and had to be demolished and restarted.

The building will now be finished by a new contractor, Moore said. The estimated $10 million cost will come from leftover funds, with the shortfall being made up by the Housing Authority's development partner, Banc of America Community Development Corp.

In exchange, the bank will be entitled to recoup that outlay if it and the Housing Authority win any damages from Tron and Berkley in future litigation.

A default letter sent by the bank and the Housing Authority in March put Berkley on notice that it could be terminated. It cited multiple concerns, including Tron's failure to install missing patio doors so the building would be completely closed off to rain and humidity, which was putting drywall and interior fixtures at risk.

Berkley officials said it is not their policy to comment.

The delay will mean a longer wait for sorely needed affordable housing. Tempo was initially scheduled to open in the fall of 2016. More than 9,000 families applied to live in the project's 122 subsidized apartments. Its other 81 units will be rented at market rate.

Tempo is part of Encore, a 28-acre $450 million mixed-income housing development replacing Central Park Village.

The project has been beset with issues.

Tempo was already behind schedule when the Housing Authority fired original Tempo contractor the Siltek Group, saying it was not complying with inspectors. There was also concern about the involvement of Siltek project manager Rene Sierra.

In December, he was sentenced to three years of probation, including six months of home detention with electronic monitoring. He was also ordered to repay $1.2 million to the government for his part in a multimillion-dollar kickback scheme involving affordable housing in South Florida.

Another Encore building, the Reed, developed leaks in at least 25 apartments less than one year after it was completed. It was also built by Siltek.

And in March, the Housing Authority was sued by Pinnacle Group Holdings after the agency terminated the firm's $7.4 million contract to buy land and develop a hotel and residential block on the southern portion of Encore.

Moore said he is still optimistic that Tempo can be completed this year.

"We have a much clearer path now," he said.

Contact Christopher O'Donnell at codonnell@tampabay.com or (813) 226-3446. Follow @codonnell_Times.