$8 million settlement ends legal dispute and City formalizes project management best practices, evaluates project delivery alternatives to design-bid-build, explores advocating changes in State public contracting laws and plans to update insurance coverage changes for design issues with major projects

PALO ALTO, CALIF. - The City has finalized an $8 million settlement, ending a legal dispute with Swinerton Builders. The legal dispute prompted a review of City project practices and formalizing best practices through City policy and procedural changes. The Public Safety Building is operational with most workgroups moved in and 911 Police Dispatch set to switch operations on October 1.

The settlement terms include the City payment of $8 million and Swinerton completing work on critical building systems that was preventing full-building occupancy and move-in. Additionally, Swinerton will dismiss their arbitration filed against the City, release all claims, and extend warranties of certain building systems. The settlement agreement reflects a significant reduction from Swinerton's claimed damages and facilitated the completion of outstanding work on the new Public Safety Building.

Due in part to more than a thousand change order requests, the project completion date was extended to September 2, 2025, and additional construction work extended into 2026. Construction is now complete, and as of August 27, 2026, all public safety workgroups except 911 Police Dispatch are utilizing the PSB. Dispatch plans to move into the facility by October 1, 2026.

The experience with PSB construction has provided several lessons applicable to current and future projects, including process improvements already implemented, risk mitigation measures, and project scheduling strategies. Major construction project practices being implemented and formalized through a City policy under development include third-party design review in addition to constructability; supporting early escalation and engagement with contractor management to resolve project issues; formal partnering before and during construction with contractor, City staff, and designers; and organizing resources for expedited review of project change order requests to avoid delays.

Other key practices being implemented or explored include reviewing insurance requirements for errors and omissions for design professionals to scale based on the size of the project; evaluating alternatives to design-bid-build project delivery such as design-build or construction manager at risk or progressive design-build; and, reviewing City liabilities introduced by the current Public Contracting Code and professional liability statutes and consider advocating for legislative solutions.

The public counter and administrative offices at the old Police headquarters at Forest Avenue are closed. Constituents needing assistance can visit the Public Safety Building at 250 Sherman Avenue, Palo Alto.

For emergencies, call 9-1-1 or (650) 321-4433. For the City's Non-emergency 24-hour dispatch center, call (650) 329-2413. For the Police Department business number/front desk, contact (650) 329-2406 Monday - Friday, 10 a.m. to 4 p.m.

• For more about the City of Palo Alto, go to www.paloalto.gov
• For police services and other information, go to www.paloalto.gov/Departments/Police
• For fire services and details, go to www.paloalto.gov/departments/fire
• For Office of Emergency Services resources and information, go to www.paloalto.gov/OES
• For the September 14, 2026 Council meeting packet, go to www.paloalto.gov/councilagendas
• For information about the Public Safety Building, go to www.paloalto.gov/psb
• For City Hall counter support, go to www.paloalto.gov/lobbyservices

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Sent By:

Meghan Horrigan-Taylor

Chief Communications Officer

City Manager's Office

Office Phone: (650) 329-2607

Email: [email protected]