A Vermont construction company and the developers of the stalled “Midtown” project in Portland have settled a lawsuit over the troubled mixed-use project.

PC Constuction filed a lawsuit in federal court a month ago, saying that The Federated Cos., developers of the Bayside project, set up its corporate structure to allow it to walk away from the project without paying some of its contractors.

Those contractors included PC Construction, which said it was owed $235,000 by the developer. But the two sides reached a settlement that did not include any payments and the suit was dismissed Monday.

The project was proposed seven years ago, but so far little work has been done. It was conceived as an $85 million multi-use complex of residential, retail, recreational and parking facilities.

The city has brought in an outside law firm for advice on how it should proceed. Portland withdrew its permits for the project in March, after The Federated Cos., which is based in Florida, missed a deadline.

Since then, the city “decided to kind of back away,” City Manager Jon Jennings said in May.

PC Construction said it was hired for pre-construction work, such as scheduling, budget-setting, cost estimating, engineering and other services. The construction company initally agreed to waive its fees, as long as it was selected eventually as the contractor for the project.

PC Construction said in its suit that it put at least 2,775 hours of work on the project, but as it entered into new contracts with The Federate Cos. for additional work, it began to ask to be paid for its efforts.

The developer didn’t reply to the requests for payments, the Vermont-based contractor said.

In a statement issued Monday, The Federated Cos. said the matter had been “fully resolved without payment or admission of wrongdoing by either party.”

The suit was dismissed and the agreement on preconstruction services “has been mutually terminated with no further obligation of either party,” the statement said.

The agreement to withdraw the suit was confirmed by Crystal S. DelleChiaie, who said she is senior marketing and public relations specialist and employee owner of PC Construction. She declined to comment further.

Portland is particularly eager to develop a large garage that was intended to kick off the project, Jennings has said. He said the city was still willing to work with The Federated Cos., which owns the land for the garage, on that aspect of the development, but it is also looking for other partners on the project. Other developments in the area are being held up because of a lack of parking, he said.

The city has a federal loan to pay for its part of the midtown project, but interest is racking up while the project has languished. A month ago, interest on the $8.9 million loan totaled more than $337,000.

Edward D. Murphy can be contacted at 791-6465 or at:

[email protected]

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