Town Approves Nearly $1 Million Payout to Fire Headquarters Construction Company

At a special meeting Thursday evening township trustees approved paying nearly $1 million to two entities that helped renovate and expand the South Orange fire department headquarters on Sloan Street.

After deliberating around 30 minutes the four trustees in attendance along with Village President Douglas Newman, voted unanimously to pay $868,000 to G. Pacillo Mechanical LLC, a construction company, and $105,173 to Colonial Surety Company, a company that bonded Pacillo's work.

Newman called the Trustees' vote the latest in a "protracted process" of getting the fire headquarters built. "It's been a 12-year path that involves protracted legal issues with what transpired," he said.

In the meeting, Newman said that plans were underway as far back as the late 1990s to refurbish the 1925 firehouse. Work began in earnest in May 2002, initially with asbestos remediation, completed in 2002, and first-phase exterior renovations, completed by March 2003. The primary construction contract was awarded to Pacillo in January 2005, and the remainder of the $4+ million project was expected to take 12 months but instead took more than four years and Colonial Surety engaging a second construction contractor, Parikh, Inc., sources said. While fire equipment and trucks were returned to the fire house in late 2005, firefighters returned to residing in the renovated and expanded building last year, and the grand opening recently was celebrated in mid-June.

Pacillo, a Hillside company, was hired for interior renovations and construction of additional space in January 2005, but its contract was terminated in November of that year for what Newman called a "performance issue."

The company then filed, in January 2006, a demand for arbitration, which the Village won. In March 2006, Pacillo appealed the court's ruling to Superior Court, which in July 2008 compelled the Village to arbitrate the dispute, sources said.

Following a series of legal actions by the Village and Colonial, from February 2009 to July 2009, compelling the other parties to join in arbitration, the Village, Pacillo, Colonial, Parikh, and Aegis Security Insurance Company agreed to participate in arbitration, which was preceded by mediation earlier in 2010.

In June, the township approved bonding for a mediated settlement with G. Pacillo, Newman said. He added that the township would introduce a bond ordinance for the payout to Colonial in September.

From the money it receives from South Orange, Pacillo will have to pay $202,000 to Colonial, Newman said. South Orange will pay $973,173 in total. The township is also in arbitration with Parikh, Inc. of Maple Shade as well as Aegis, the company that bonded Parikh's construction work for Colonial.

Parikh was hired by Colonial in March 2006 to finish the job after Pacillo was let go. In 2008 the state attorney general charged Parikh and Parikh Inc. with theft for allegedly submitting false documents in order to win school building contracts in Clark, NJ.

Newman would not say how much Parikh and Aegis are claiming that the township still owes them, citing the fact that the case is still in arbitration. Newman said the township's position is that the companies have been paid in full.

"I can't say any more, we are in the midst of a legal dispute," Newman said.

The bizarre saga of how the town found itself in this position was on the mind of the lone public speaker at the meeting, William J. McDermott. He asked if there would be an explanation of, "how this progressed, how we got to where we are."

Newman said he would give a "verbal narrative" of what happened after the remaining disputes are settled.

Trustee Howard Levison expressed relief after the meeting at putting this part of the fire department ordeal in the town's history books.

"It's about time so that we can move forward," he said. "Then we'll go back to see how we got where we are."