The Palo Alto Unified School District has agreed to pay $540,000 to settle a $3.8 million lawsuit regarding a breach of contract during the construction of the Media Arts Center and the Math and Social Studies Building at Palo Alto High School.

The cost of construction for the two buildings came in under budget even after the settlement, according to a press release from PAUSD.

“This settlement puts an end to the legal process and attorney fees,” Supt. Max McGee said in the press release. “Even after paying the settlement amount, this project came in under budget, and the remaining amount can be put to further improvements on the campus.”

Assistant Principal Jerry Berkson is delighted by the news as it provides money to be spent on future projects to upgrade the campus.

“It’s good news because we had to set aside $3.5 million just in case we lost the whole thing [lawsuit],” Berkson said. “With us only having to pay around $500,000, all the money comes back, and we can put it towards other projects.”

The specific use of the left over money has yet to be decided on. However, it will be used toward improving the Paly campus as a part of the Strong Schools Bond Program according to Berkson.

“There’s a lot of decision-making going on right now,” Berkson said. “We have the new gym coming up, the library project, the science project and we have several smaller projects that would be great with that money. Once the big projects are finished, we may also do some internal construction in some of the buildings. But down the line, any of those would have to be voted on to spend the money.”

The lawsuit filed by Taisei Construction Corporation was in the amount of $3,793,000 against PAUSD, Deem Lewis McKinley Architecture and the construction manager Gilbane. The settlement has been reached by all parties with payments from each, according to the press release.