One contractor in Anchorage’s lawsuit over port settles for $5.5 million

The city of Anchorage has reached a settlement with one of the parties in an ongoing lawsuit over the botched Port of Anchorage expansion, a $5.5 million payout that officials hope is a first step in recovering many millions more. 

Documents submitted to the Anchorage Assembly earlier this month describe the settlement between the city and MKB Constructors, which worked as a subcontractor on the expansion project with Quality Asphalt Paving Inc. The Washington-based company was mainly responsible for driving steel sheet piles into the floor of Cook Inlet to create the base of what was to be an expanded, upgraded port.

The project ultimately cost more than $300 million and resulted in a half-finished, unusable new dock. Construction stopped in 2010, and the city has sued the private companies involved in project design and construction, including MKB.

A separate lawsuit was filed against the U.S. Maritime Administration, or MARAD, the federal agency that was in charge of overseeing the port expansion project.

City officials say they're hoping to fully recover the money already spent and put it toward a scaled-back but critical "modernization" of the port. City attorney Bill Falsey noted that MKB is just one of seven companies from which the city is seeking damages. The others include the project's designers, PND Engineers of Anchorage and GeoEngineers from Seattle, who have said they're not to blame. 

"This is the first check being written to us," Falsey said.

He added: 'This is the beginning, not the end."

Under the terms of the settlement, MKB admits no liability or wrongdoing, Jason Kettrick, a Seattle attorney who worked as the leading defense attorney for MKB, said in a phone interview Wednesday. MKB, a smaller construction outfit, also won't directly pay the settlement amount — the money will be paid by insurance, Kettrick said.  

The settlement was "just a business decision made on the part of the insurance carriers," Kettrick said.

The Assembly voted Tuesday to put most of the settlement money toward the new port modernization project. A small portion will go into a legal escrow account.

So far, the Assembly has authorized the city to spend up to $9 million in legal fees for the port litigation — an amount boosted from $4.3 million last year.

A trial in the lawsuit involving the contractors has been set for April 2017.