Deadlines blown in construction of NC mental hospital. A court fight could be next.

A state psychiatric hospital that was supposed to open in the fall of 2014 likely won't be finished until August or September 2018, the Department of Health and Human Services says.

The new Broughton Hospital in Morganton is still dealing with shoddy construction work that has to be redone – even after the state fired the contractor earlier this year, according to a presentation Wednesday to the Joint Legislative Oversight Committee on Capital Improvements.

The company that insured the $129 million project through a bond is managing its completion, and while that company says it will be done in March, DHHS Chief Financial Officer Rod Davis says that's unlikely. "They continue to miss more dates on the schedule, and they're getting further behind in some areas," Davis said. "We see a potential for a very large punch list when it's all done."

The construction firm that the state fired, Archer Western Contractors of Charlotte, has now been re-hired as the completing contractor by the insurance company on the project, Travelers Insurance, but it's using a different company as construction manager. Among the construction mistakes that need to be fixed: 60 percent of the floors aren't balanced correctly, spray-on fireproofing material was installed incorrectly, and a pedestrian bridge wasn't aligned properly. Davis says the project suffered from a "general lack of good project management and quality control."

The March completion date set by the insurance company, Davis said, doesn't account for inspections and fire alarm testing, and contractors are already missing deadlines and completing work in the wrong order.

Legislators voiced concerns about the project but didn't offer much feedback at Wednesday's meeting. "We're kind of stuck over a barrel now with respect to getting this thing open," said Rep. Dean Arp, a Union County Republican.

The delays come amid high demand for psychiatric hospital beds in North Carolina, and while the old Broughton Hospital will stay open until its replacement is ready, the new building will increase the capacity from 297 beds to 382. In 2016, the wait to be admitted to the current hospital there averaged four and a half days, according to a survey by the National Alliance on Mental Health.

The construction delays aren't adding costs to the state, which is charging damages of $3,600 per day until the project is done. But an attorney for the state indicated that a court battle over construction costs is looming with Archer Western. The company has made a $26 million claim with the state for its work on Cherry Hospital in Goldsboro, a claim the state has rejected. "You can assume they will follow the same playbook" with the Broughton project, said Durwin Jones, an attorney with the N.C. Department of Justice.

State officials haven't yet decided what to do with the old Broughton Hospital buildings, which include 900,000 square feet of space and need $56 million in repairs and renovations. The Department of Administration is working on possible uses, but finding a good fit "is going to be a tough thing to do," Davis said.

This story was originally published November 13, 2017 at 4:40 PM with the headline "Deadlines blown in construction of NC mental hospital. A court fight could be next.."