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$9 million settlement paid to city after bid-rigging found on convention center expansion project

Construction was supposed to start on the project in 2019, but plans were halted after accusations of misconduct were uncovered in the bidding process.

DENVER — Just about two years after Denver city leaders asked the prosecutor's office to investigate allegations of misconduct during the bidding process for a contractor working on the Colorado Convention Center expansion project, a $9 million settlement has been reached.

In 2018, the Denver City Attorney’s Office found that over the course of bidding on the project, there was an improper release of city documents, improper discussions of the project and the altering of approved project plans.

>>>The video above is from 2018 when the investigation began. 

In December of that year, Denver Mayor Michael Hancock said the concerns prompted the city to terminate its contract with Trammell Crow, the company that was providing program management services for the expansion project.

RELATED: Mayor asks DA to investigate ‘misconduct’ in Colorado Convention Center expansion contracts

The Denver City Council first approved more than $21 million in contracts for the convention center expansion in early 2018, according to the Denver Business Journal. This comes after Denver hotel owners agreed to a 1% increase in lodging taxes, as well as a bond sale aimed at funding what was expected to be a $233 million revamp of the facility.

The expansion includes the addition of an 80,000-square-foot meeting and ballroom space, as well as a 50,000-square-foot outdoor terrace on top of the existing building.

On Wednesday, the city announced it will receive a $9 million settlement to resolve claims against Mortenson Construction and Trammell Crow Company for violating the city’s public procurement rules during the early stages of planned renovation work at the convention center. 

RELATED: Mortenson to pay $650,000, work to build COVID-19 overflow hospital in bid-rigging settlement

“This settlement means we’ve made taxpayers whole, our well-established procurement rules have been fortified and this critical public project is moving forward to support our post-COVID economic recovery,” said Hancock.

“This case involved a serious breach of Denver’s well-established procurement rules by companies that should have known better. The watchful efforts of city employees in this administration uncovered the breach and it is because of their efforts, the leadership of Executive Director Eulois Cleckley at the Department of Transportation and Infrastructure and the tireless work of the City Attorney, Kristin Bronson, and her team, that Denver’s reputation for ethical bidding and procurement remains intact.”

The Colorado Attorney General (AG) joined that investigation to review whether the companies had violated the Colorado Antitrust Act and ultimately settled in April of this year. Since then, negotiations have been ongoing related to damage claims for the city.

The settlement agreement requires:

  • $9 million cash payment to make the city whole ($4.5M from Trammell Crow and Mortenson respectively,) which will reimburse the project for damages and resolve civil claims. 
  • Mortenson to not bid on city contracts for three years. 
  • Public apology to the city. 

“Mortenson's actions in the procurement of the Colorado Convention Center project were contrary to who we are as a company and were completely unacceptable,” CEO Dan Johnson wrote.  “We recognize in addition that our actions caused significant harm to the city. We are truly sorry, and we accept responsibility for our actions.”

“We are pleased to have resolved all matters related to the Colorado Convention Center expansion project. We deeply regret the disruption that was caused to the expansion project and apologize again to the city and the people of Denver,” Trammell Crow Company Senior Managing Director Bill Mosher said. “We now look forward to devoting our full energies to helping our great city, and our clients who do business here and elsewhere in Colorado, to prosper in the years ahead.”

RELATED: Denver selects new Colorado Convention Center contractor following bid-rigging investigation

In July, Greeley-based Hensel Phelps Construction was recommended by the City and County of Denver to move forward with designing and building for the expansion project.

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