The expensive wrongful termination and racketeering lawsuit against Empire State Development at Canalside

The ice rink was completed but the cost escalated because of an alleged illegal firing of the original contractor state officials.

By Tony Farina

In 2015, DiPizio Construction filed a civil racketeering lawsuit claiming Empire State Development Corp. illegally terminated the company’s $19.8 million contract to build the ice rink, old-style canals and footbridges at Canalside.

Dipizio did more than half of the work before they were fired. Pike Construction finished the project.

In November 2011, DiPizio Construction outbid Pike and four other companies to build the ice rink, at Canalside. DiPizio’s low bid of $19.8 million was $3 million lower than what state engineers projected.

Construction began in May 2012.


Mark E. Smith, construction project manager for the harbor development corporation, disputed frequently with company CEO Rosanne DiPizio over design changes on the project, over which materials could be used and over the disposal of contaminated soil.

 

In July 2013, the state terminated its agreement with DiPizio accusing DiPizio of “deficient work” on the project, which was still under construction at that time.

State officials claim DiPizio was unable to complete the project properly or on time.

Company CEO, Rosanne DiPizio said “design problems, weather problems and the state’s construction people” caused the delays.

Travelers Casualty and Surety Co. – the DiPizios’ performance bonding company – said delays on the ice rink job were caused by the state’s poorly designed plans(which had to be modified) and state officials wrongly terminated DiPizio Construction from the ice rink job and should have allowed the DiPizios to complete it.

In September 2013, Travelers hired Pike Construction of Rochester for $11.5 million to complete the work.

DiPizio claims state officials, notably Sam Hoyt, regional president of Empire State Development, Smith and others, through wire fraud and mail fraud – created a false paper trail attempting to show the company was incompetent.

DiPizio claims state officials really wanted the contract turned over to politically connected Pike which has given tens of thousands in donations to Gov. Andrew M. Cuomo and Lt. Gov. Kathy Hochul.

As proof of the host of boondoggle design errors, after taking over the project Pike was delayed eight months because of damage to concrete that was the result of a harbor development company design error.

DiPizio also filed a state court lawsuit alleging DiPizio Construction was wrongly terminated.

While Pike successfully completed the project in 2014, with legal fees, and cost overruns from wrong design, the project cost taxpayers millions more than it likely would have if DiPizio had not been terminated.

Now the question to be determined in court is did the state improperly terminate DiPizio, and if so, how and more significantly, why?