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Contractor Blames Sub for Hotel Delays

Thursday, March 16, 2017

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The construction of a 1,048-room, $370 million luxury hotel in Austin, Texas, has faced delays and the general contractor says a subcontractor is responsible.

Hunt Construction Group (Scottsdale, Arizona) has filed a federal lawsuit seeking $27 million against Cobb Mechanical Contractors Inc., headquartered in Colorado Springs, Colorado, for allegedly failing to provide enough workers to keep the project on schedule, the Austin American-Statesman first reported earlier this month.

Austin skyline
© iStock.com / dszc

The legal row involves a new hotel set for downtown Austin, Texas.

The breach-of-contract suit was reportedly filed in U.S. District Court in Austin. The case involves the 37-story Fairmont Austin, which officials say will open in early August. The downtown hotel is described as one of the largest constructions project in the city and was designed by Gensler architects.

The subcontractor named in the suit did not immediately respond Wednesday (March 15) to a D+D News request for comment on the suit.

According to its website, Cobb Mechanical has completed 700 projects throughout Colorado, Texas, Kansas, Arizona and other states. The family-owned and operated company was founded in 1969 and its portfolio features University of Colorado and Texas State University projects.

Contractor’s Accusations

Hunt Construction was awarded the contract to build the hotel in March 2014. The project, being developed by Manchester Texas Financial Group, began in November that year.

Subcontractor Cobb Mechanical was originally contracted to handle mechanical and plumbing system installation for the 1.4-million-square-foot structure.

However, in November 2016, Hunt moved to partially terminate the contract—worth $31 million—with Cobb, calling for the subcontractor to stop work on the hotel’s first seven floors, and focus on the upper floors of the hotel tower.

Hunt says securing a replacement exposed it to significant additional costs, the report said, citing the lawsuit.

"The subcontract provides that Hunt is not required to sit by and wait while delays and damages mount up," the suit states.

In addition to not provided enough workers for the job, Hunt’s lawsuit says the work completed by Cobb did not meet quality standards. For example, Hunt accused Cobb of not resealing a temporary roof structure before a rainstorm, which led to “significant” damage, the report said.

The insurance company that issued the subcontractor’s performance bond is also a named party to the suit, the report noted.

The lawsuit comes a month after federal workplace safety officials opened an investigation involving the project after a metal bracket fell from an external construction elevator, the Statesman reported. No injuries were reported in that incident.

   

Tagged categories: Business matters; Commercial / Architectural; Developers; Disputes; General contractors; Hotels; Laws and litigation; Subcontractors

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