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Construction on the new Legacy at Livermore downtown housing and retail development has come to a temporary halt, according to a statement shared by developer Legacy Partners on social media.
“Earlier this week, we were notified that Katerra, the contractor for the development, filed for bankruptcy. Katerra has provided both a performance and payment bond for the development and Legacy Partners has contacted the bonding company accordingly. Legacy is working with the bonding company so that this development can continue with as little interruption as possible,” the statement read, which was also shared by the city on Facebook.
Katerra was contracted to complete the construction of the mixed-use development at First Street and South L Street, consisting of a total of 222 apartments and about 14,000 square feet of retail space. However, the company voluntarily filed for relief under Chapter 11 of the U.S. Bankruptcy Code in the United States Bankruptcy Court for the Southern District of Texas, Katerra officials said in a statement.
“While a number of negative factors have led to Katerra’s current challenges, we are implementing initiatives on multiple fronts to maximize value and provide the best path forward for Katerra and its many stakeholders,” said Katerra chief transformation officer Marc Liebman in the statement.
He continued, “Our multi-step action plan has rapidly evolved and includes consolidating U.S. activities, continuing our international businesses, advancing key asset sales, securing DIP financing, and commencing an in-court restructuring process. We are grateful to the extraordinary ongoing work and support of the Katerra team and other core constituencies through this extremely difficult time.”
Legacy Partners officials said that it hasn’t yet been determined when the development will resume but they confirmed that it will continue.
“Legacy Partners is not going through bankruptcy. Katerra, the firm that is responsible for carrying out the construction of the project, has filed for bankruptcy,” said David Eichler of Legacy Partners.
He added, “There’s a payment and performance bond that Legacy Partners paid for as part of the project. Essentially, what that means is the bonding company now has to figure out how to get the development restarted and construction completed.”
The city noted in its Facebook post that it has received “a number of inquiries” from community members about the status of the project in light of Katerra’s financial challenges.
“The bankruptcy of the general contractor for the Legacy project in Livermore is unfortunate but far from catastrophic,” Mayor Bob Woerner told the Weekly.
“The project is fully bonded and construction will restart as soon as the requisite legal and contractual permissions are obtained. It is in all parties’ interests to get the project completed with all due speed,” Woerner said. “I expect we’ll know more in the near future as to what the revised schedule will be. In the meantime, the city stands ready to assist where appropriate.”
Construction at another Legacy project site in Hayward has also been discontinued as a result of Katerra’s bankruptcy filing.
9 days and counting….. We have been assured it’s a simple matter of the bonding company replacing the contractor. The mayor assures us “This is not a catastrophe!”