Work to enclose state theater

SANDUSKY — After months of inactivity, there's a positive development to finish rebuilding the Sandusky State Theatre. Those representing the Sandusky State Theatre recently came to terms with a general contractor, Cleveland-based John G. Johnson Construction, to enclose this downtown Sandusky structure facing out toward the Jackson Street parking lot — left open since a freak windstorm destroyed this building five years ago. "It is being completed … to prevent any damage from winter weather while the ongoing mediation on the larger portion continues," theater board chair Colleen Shay Murray said. "The work to enclose the building is permanent structure work, meaning that the work completed during this phase is part of the overall scoped project." Theater board members are finalizing an agreement with the construction company to work on the enclosure. Murray estimates the enclosure tasks, upon beginning, could take anywhere from three to four months. There's still a fundamental disagreement, however, between both sides about actually completing all unfinished tasks. Right now, there's no deal in place to complete what's known as "finishing-in work," Murray said. This would include work involving plumbing, electrical, drywall and flooring applications — all outlined in the original contract. "The timeline and total cost for the full project are still part of the mediation process," Murray said. "We are still mediating the full project. We are encouraged by the continued collaborative communication with the surety company." Pressing questions Now lasting more than a year, the dispute pitting the theater's board against its former contractor, Iowa-based GC3 Builder, centers on a contractual amount. In short, theater board members don't believe they need to pay a penny more for their project, pegged at about $24.5 million. GC3, meanwhile, indicated it's owed roughly $9 million more — and, in summer 2024, workers walked off the job site. Board members said those representing GC3, which won't provide public comment on the situation, haven't offered up any documentation to substantiate claims of this supposed multimillion-dollar difference. Though board members, in good faith, revealed as much information and insight as possible to best let the public understand what's happening. Through Register reporting, here are the most pressing questions with answers coming from two leading theater officials: Q: When could the theater reopen? A: Officials pegged the project at about 80% complete. Hypothetically, if somehow all parties agreed to resolve their differences and restart work today, then it would take at least nine months to finish the rebuild. In this scenario, this would push the project's end date to, at the very earliest, mid-2026. Board members made one point crystal clear. "There is no other option than to finish this beautiful theater for this community," Murray said. "We need to find out more information and get all of the facts to help us be knowledgeable and most responsibly finish this project." Q: How'd we get here? A: A freak windstorm occurring on June 10, 2020, nearly destroyed this iconic venue in full. It caused the roof to collapse. Massive amounts of debris slammed onto the stage, obliterating this platform and leaving a giant, gaping hole in its side. Construction began immediately thereafter. And, truly, no major issues halting progress arose until about a year ago. In summer 2024, GC3 stopped working due to perceived disagreements with contract language opposed by theater board members. GC3 claimed it couldn't finish the job without receiving more money. But theater board members countered, indicating both sides came to a prior compromise on an amount that GC3 exceeded. Here's a quick timeline to best understand the escalating prices: • In 2022, the theater's original contract rebuild price with GC3 totaled about $15.5 million. • In 2023, GC3 came to board members and believed it needed another $10 million, for a total of $26 million, to finish this job. • The theater's board disagreed, instead telling GC3 to get the job done at $23.5 million — $7 million above the original contracted amount — and not a penny more. A contract signed by both parties agreed to this price without GC3 exceeding this amount. • In June 2024, local subcontractors raised concerns with board members about payment-related issues with GC3. This ultimately resulted in at least five companies filing liens this past fall against the state theater in hopes of receiving compensation for work finished. • The board agreed to raise its final price to about $24.5 million to cover a new, necessary expense asked by theater board members. • Shortly thereafter, GC3 came back to the board, demanding it needed nearly $9 million — or, roughly, $8 million more above the latest $1 million expense. In this scenario, this would bump the total project cost to $32.5 million. • At this time, board members — while pointing to the $24.5 million contractually agreed-upon price — refused to pay a single cent more. Board members said they tried to restart negotiations with GC3, however, those representatives would not budge. Note: Previous news stories indicated this project totaled $30 million, which was scaled down prior to any contract disputes. Q: What's happened this past year? A: Fast-forward to fall 2024, and the theater called in a performance bond against GC3. Issued by an insurance company, this ensures a company — in this case, a contractor — will successfully complete a project, adhering to the contract details both parties previously agreed upon. "The negotiations with the general contractor just didn't work. That's why we had to call in the bond," said Tim Parkison, a longtime theater board member and spokesman for this situation. Parkison explained how the contract with GC3 stipulated a "do-not-exceed figure," which totaled $24.5 million. "They weren't able to complete it for that (amount), and they broke the contract," Parkison said. "We are following the process, and the next step in it is we are able to exercise our rights to call the bond. That process needs to play out before we can move to the next step." Since then, consultants hired by the insurance company have been on site in downtown Sandusky, analyzing and evaluating the project. This past spring, board members anticipated a decision coming in the summer — but, as of this week, they're still awaiting word on a final decision. Q: Where is all this heading? A: When the consultants — through an insurance party, which forces action between one or both parties embroiled in a conflict — finish their evaluation, one of three options will result. The consultants could: 1. Side with board members, which means GC3 or another company — based on what the insurance party believes — must complete all tasks without receiving any more money from the state theater beyond the $24.5 million amount 2. Rule against the theater and its board members, meaning the state theater would need to pay GC3 or another contractor in full to finish the project 3. Bring all parties together to work out a compromise Board members truly don't know what decision the insurance party might make. But they're hoping, based on their reasoning, that option No. 1 gets selected. "We paid for a building that was supposed to be finished at ($24.5 million,) and it wasn't," Parkison said. "We shouldn't be responsible for spending any more money than the contract stipulated." Added Murray: "We have worked with this contractor for the better part of 3.5 years, and then we chose to protect the board and the stakeholders by not paying anything more at this time." Many funding sources — including state tax credits, local tax dollars and donations coming from community members — contributed toward this project. With her comments, Murray and other board members want to ensure they're getting a fair deal without anyone getting ripped off. Murray and Parkison both vowed to convey all these details to public stakeholders, which includes the Register, to remain transparent and publicize as many details as possible. "This has truly been a very complicated situation," Murray said. "We would like to bring all of our great sub(contractors) back. We want to rebuild those relationships." Board members, who maintained their 100% commitment to seeing this process through, promised to update the public on any new information with the next benchmark likely being the insurance party's decision based on whichever recommendation consultants choose. "We wish things were more definitive, but we are still trying to work through this difficult process," Parkison said. "We know this is the community's theater, and we are dedicated to the community to get this project done."