The Edgewater Hotel Loses Arbitration, Ordered to Pay Contractors
The Edgewater hotel recently lost an arbitration ruling when the panel ruled it would need to pay more than $14 million to the general contractor and an architectural firm regarding its $100 million construction project’s delays and cost overruns. The ruling came from a three-person panel and also included criticism of the contract language and the way Bob Dunn, The Edgewater’s owner, micromanaged the project. Dunn had hired Hammes Co. to manage the project in November 2012. There are still several unfinished projects after the hotel’s fall 2014 opening.
This ruling comes a year after JH Findorff & Son filed a $16.3 million construction lien against The Edgewater. It was one of 16 liens totaling nearly $24 million against the hotel by contractors.
The arbitration ruling was 51 pages in length and ordered Findorff to pay $1.4 million to Nickles Electric and $3.1 million to JF Ahern Co. The largest judgment was against The Edgewater, which was ordered to pay $13.8 million to Findorff and nearly $300,000 to the Boston-based company Elkus/Manfredi Architects. The panel found The Edgewater did not properly manage the project after nearly 30 days of testimony, stating the hotel failed to provide timely design and construction documents to contractors. It also found it failed to give timely decisions to progress and advance construction and did not operate in good faith when dealing with the general contractor, subcontractors, and the architect.
Arbitrators acknowledge there are usually delays in major construction projects and disputes occur frequently. However, there are times when third parties need to step in and help those involved stay on track.