Arinc Inc. will pay St. Louis Park $1.05 million for failing to deliver a community-wide wireless Internet system powered by the sun.

In arriving at the agreement, neither the company nor the city admitted responsibility for delays and performance problems that led the city last December to find the company in default of its contract.

Said Arinc attorney Joe Dixon, "The city and the client [Arinc] have different views of what went wrong. We are both pleased to reach a settlement.''

By Jan. 30, the city will remove and return to Arinc the solar panels and radios on 490 poles installed across the city.

Because the poles are mounted in concrete in the ground and the ground soon will be frozen, they will be removed over the course of two to three months starting next May, said St. Louis Park City Manager Tom Harmening. The city will sell the poles for scrap metal.

Eight miles of buried fiber-optic cable will stay in place and become the property of the city for some future use, Harmening said.

When St. Louis Park contracted with the Maryland company in December 2006 for a futuristic solar-powered wireless network, the city had hoped to help bridge the digital divide by offering more affordable Internet service to residents and businesses, Harmening said.

"It was intended to better connect the city overall,'' he said.

St. Louis Park chose Arinc to build the system, largely because Arinc had proposed making it solar-powered; it was also the low bidder on the project. But after repeated delays, the system wasn't performing up to St. Louis Park's expectations, and the city finally found Arinc in default of its contract. The city filed a lawsuit last spring seeking $1.7 million for the unfulfilled contract and another $50,000 in damages and attorneys' fees.

Whether the city will try again to build a wireless network is uncertain. Council members agreed last February to shelve the decision for a year while waiting to see what kind of financial settlement the city would get from Arinc.

They also wanted to monitor development of wireless technology.

The settlement returns to the city all the money it spent while Arinc was under contract to build the network. But it does not pay for research and development costs the city bore prior to the contract, Harmening said.

Laurie Blake • 612-673-1711