Pan Am Plaza damage subject of court battles

The owner of Pan Am Plaza’s underground parking garage, which the city partially closed on Wednesday over safety concerns, alleged in 2009 that lack of maintenance on the plaza above it by Indiana Sports Corp. was damaging the garage.

New York-based real estate investor Dali Associates LP in 2009 filed a breach of contract suit against ISC in U.S. District Court for the Southern District of Indiana, alleging repairs to the garage from water leaks could cost more than $2 million to fix.

“During its ownership, ISC failed to take necessary steps to maintain the surface in good repair, thereby causing severe damage to the garage,” Dali alleged.

That suit was settled last March.

ISC officials Thursday deferred to their attorney, John C. Trimble of Lewis Wagner, who said settlement terms were confidential. He declined comment.

But records filed by ISC in response to the 2009 lawsuit appear to show that Dali ultimately was responsible for addressing leaks into the garage from the plaza above. ISC sold the plaza in 2008 to Indianapolis-based Kite Realty Corp.

In 1995, Dali and ISC amended an agreement governing the property after the discovery of water penetrating the plaza surface and into the ceiling of the parking garage below.

“To remedy this problem it is necessary that a new drain system and/or a protective layer of waterproof material … be installed,” stated the amendment.

“However, ISC is financially unable to install and maintain the (protective layer). Consequently, [Dali] is willing to do so” the amendment stated, as long as ISC owned the plaza and no additional structures were added to it.

The plaza, garage and surrounding 12-story office tower and ice-skating complex were built for the 1987 Pan American Games in Indianapolis.

On Wednesday, the city’s Department of Code Enforcement ordered the pedestrian plaza closed and a portion of the parking garage beneath it restricted from parking, citing concerns about the structural integrity of the garage that pose “an immediate risk to life, safety and property.”

The closed portion of the garage involves about 100 parking spaces, or about 10 percent of the garage’s capacity.

Code enforcement inspectors discovered damage to fasteners that hold horizontal ceiling beams against the wall of the garage.

A preliminary inspection appears to show the damage to be the result of years of water intrusion and the effects of temperature fluctuations, said Rick Powers, director of code enforcement for the city.

Asked why the entire garage wasn’t closed, Powers said the areas of concern were limited to specific areas. “The southeast exit is the worst area that we noticed.”

City officials said it likely will take weeks for an independent structural engineering firm to perform an evaluation of the underground parking structure.

“We hope to have someone under contract if not today then tomorrow,” Powers said Thursday morning.

Until a thorough inspection is completed, it’s unclear the scope or cost to the repairs that will be needed to bring the site into compliance.

The nearby office tower and skating rink that are part of the Pan Am Plaza complex remain open.

The now-closed brick-paved plaza had figured into the plans of the 2012 Super Bowl Host Committee, but spokeswoman Diana Boyce did not immediately know what uses were contemplated. “We were close to having [a plan] finalized,” before the city’s order was issued Wednesday, she said.

“Obviously the public-safety issue is the highest priority,” Boyce added.

Court records show garage owner Dali knew about water leakage as far back as 1995, when it amended its agreement with ISC to be “willing to” install and maintain a new water drain system and protective layer beneath the plaza. It’s not clear whether that work was carried out.

But, in 2008, Dali went after Central Parking System of Indiana, which formerly operated the garage under a lease, in a lawsuit filed in federal court.

Dali alleged that the tenant was responsible for maintaining the garage and that it, as garage owner, was having difficulty refinancing the garage because a lender’s inspection found maintenance issues.

To eventually secure refinancing, Dali said it spent $248,892 to address the maintenance issues.

Central, the parking operator, countered that Dali failed to maintain the “membrane” of the garage, alluding to waterproofing. Dali replied that the maintenance work at issue was not related to the membrane.

Central Parking refused to make repairs, alleging the problems were caused by damage from water leaking from the surface. Central Parking hired an expert, who wrote in a report that the plaza “is in need of extensive repair,” lacking adequate drainage—and that pavers, mortar and limestone of the above plaza were poorly maintained, according to court records.

That suit was settled in 2009, at which time Dali sued ISC.

Kite, the current owner of the plaza surface, has not been named  as a defendant in Dali’s latest suit, at least not yet. Kite officials could not be reached for comment Thursday morning.

Dali in 2009 alleged that part of the $2 million in costs to address garage issues includes a “disadvantageous” settlement and lease amendment it had to enter into with Central Parking.

Armand Lasky, principal of New York-based Northeast Security Development Corp., a partner in Dali Associates, said he had yet to sort through the city’s action involving Pan Am Plaza.

“This [garage] is not structurally unsound,” he said.

Lasky deferred further questions to Indianapolis-based Denison Parking, which currently manages the Pan Am garage for Dali.

Denison officials were not immediately available for comment Thursday.