City looks to penalize contractor for delay in opening Fire Station 3

Palo Alto Fire Station No. 3 at Newell Road and Embarcadero Road isn't quite finished. Post photo.
Palo Alto Fire Station No. 3 at Newell Road and Embarcadero Road isn't quite finished. Post photo.

Daily Post Correspondent

Construction of Fire Station 3 at Embarcadero Road and Newell Road is now a year past the project’s original due date, and Palo Alto officials say they will charge the contractor $1,500 for each day of delay.

The announcement comes as the cost of the project has ballooned by 38% over the last two years. The city’s capital project budget for this fiscal year pegs the cost of Fire Station 3 at $10.1 million — up from a $9.9 million cost estimate in the previous year’s capital budget, and $7.3 million the year before.

The city agreed in late 2017 to pay $5.94 million to Strawn Construction of San Jose to build the new fire station at the corner of Newell and Embarcadero roads. Construction started in January 2018 and was expected to be finished by January 2019, a deadline that was extended to March 10, 2019 due to minor changes in the project.

Now the city says it expects construction of the fire station to be “substantially complete” this month.

“The contractor failed to meet the contracted schedule and has been notified of the city’s intent to assess liquidated damages … in the amount of $1,500 per day,” City Manager Ed Shikada said in a report to the City Council.

The report didn’t say for how many days the $1,500 in damages would be charged. If the late-fee clock started on March 11 last year, that would add up to 300 calendar days as of Jan. 4.

The late fee is intended to help the city cover the costs of the delay, according to Shikada’s report. One of those costs is an additional $102,141 for construction administration services from Shah Kawasaki Architects, or SKA, which also did the architectural design for the fire station. The extra money would bring the total amount the city has allocated to SKA for the fire station to $916,383.

The council will vote Feb. 3 on increasing the amount of SKA’s contract. SKA’s contract amount was increased twice before: by $97,626 in October 2018 and by another $117,564 in June. The first increase was because the design review process for the project took longer than expected.

Strawn Construction’s office was closed yesterday, and company president Randall Strawn didn’t immediately respond to a phone message.

In a July 31 news release, the city said the fire station was “making solid progress and is expected to be complete this fall, despite several setbacks, including the bankruptcy of a subcontractor.”

Subcontractor goes bankrupt

The subcontractor, Concord-based HVAC Service Heating and Air Conditioning Inc., filed for Chapter 7 bankruptcy in May, the Daily Post reported previously. A court filing indicated the company had $2,363,485 in unpaid liabilities and 79 creditors, including seven related to recent vehicle purchases. HVAC Service Heating and Air Conditioning Inc. was in charge of installing the exterior wall covering, ventilation and air conditioning for the new fire station.

The new fire station will be a replacement for the previous Fire Station No. 3, built in 1948. At 6,663 square feet, the new two-story fire station will be about twice the size of its single-story predecessor.

The new fire station is a drive-through design in which trucks will enter from Newell Road and exit onto Embarcadero, eliminating the need to back in from Embarcadero and block traffic.

During construction, Station 3 fire crews moved temporarily to 2000 Geng Road, a mile and a half away on the other side of Highway 101.

Police station’s cost estimates have jumped too

Fire Station No. 3 is part of Palo Alto’s infrastructure plan approved in 2014. Among the plan’s 10 projects are a $50 million parking garage on California Avenue, now under construction and expected to be finished this year.

Construction of the parking garage will be followed by a police station in the California Avenue district, another item in the city’s 2014 infrastructure plan. Cost estimates for the police station have risen dramatically, to $115 million in this fiscal year’s capital budget compared to $57.8 million two years ago.

The plan also includes the replacement of Fire Station No. 4 at 3600 Middlefield Road, so that the building will have a high chance of staying fully operational after a big earthquake or other disaster. The project will cost an estimated $10.2 million.

A $29 million downtown parking garage is also one of the 10 projects in the infrastructure plan. That project is on hold. Instead, the city is planning a downtown automated parking guidance system at a cost of $2.8 million. The system will tell drivers where parking is available downtown. The project is expected to go out to bid this year.


  1. This City can’t manage large projects. Whether it’s the library or the overruns with the police station project, that hasn’t even begun, you can never predict how much money they’ll spend or how late they will deliver the project. This doesn’t bode well for the grade separation projects, if they ever get the money for those.

  2. I’m tired of seeing my taxes wasted and I think that this fall I’m going to vote against the incumbents because of things like this. Council and the city manager need to know this is not OK.

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