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For a large part of the 2019 summer, Oceanwide Plaza was making waves in the Los Angeles construction scene. In June alone, the stalled project racked up nearly $40 million in mechanics liens from unpaid contractors! Now that temperatures have started to cool off, it looks payment disputes in Los Angeles County may be following suit. The 497 liens filed in LA County in August reached only $52 million. (That’s nothing to sneeze at – but it’s less than half of June’s high of $109 million.) Today we’re taking a closer look at the 5 biggest liens of the month.
Before you start any job, learn the red flags of construction payment – the first signs that a payment problem may be headed your way. If you’re worried about getting paid on a construction project, make sure you protect your right to file a lien. California requires contractors to submit specific documents within specific deadlines in order to use a mechanics lien to get paid.
Table of Contents
The 5 biggest liens in Los Angeles County (August 2019)
1. $5.1 million lien against HP Real Estate Development in Claremont
Lien Amount: $5,101,442.33
Claimant: American Multifamily, Inc.
Hiring Party: HP Real Estate Development
Property Address of Lien: 111 Bucknell Ave, Claremont, CA
Property Owner: HP Real Estate Development
HP Real Estate Development, also known as Hanover Pacific, hired American Multifamily to construct 292 student apartments and classrooms on the campus of Keck Graduate Institute (KGI). When HP didn’t pay the $5+ million bill, American Multifamily filed the biggest mechanics lien of the month in Los Angeles.
Hanover Pacific is located in Irvine, CA and constructs student housing and community development. Since last year, Hanover Pacific has been the subject of five payment disputes or slow payment incidents. Based on the jobs publicly available, contractors working with Hanover Pacific experience payment issues on 63% of jobs. It would appear that Hanover Pacific is engaging in some risky business with subcontractors on their student housing jobs.
2. $3.2 million lien against Tramonto Land Holding in LA
Lien Amount: $3.2 million
Claimant: Completely Concrete Structures, Inc.
Hiring Party: ETCO Homes, Inc.
Property Address of Lien: 17331 Tramonto Dr, Beverly Hills, CA
Property Owner: Tramonto Land Holding, LLC
Once again, ETCO Homes, Inc. lands among the five biggest liens in LA County, as it did so back in July with a $9.9 million lien. While this month’s lien is only about ⅓ the size, it’s still troubling to see Completely Concrete locked in another payment dispute with ETCO. ETCO Homes hired CCS in July for work the concrete contractor provided on the Tramonto Land Holding project in Pacific Palisades, CA.
Based on their recent payment history, ETCO Homes is a medium payment risk. They’ve been the hiring party on five payment disputes in the past 12 months – two of them from CCS. ETCO has been in business for nearly 30 years while creating luxury homes in Los Angeles County.
3. $2.6 million lien against 9040 Sunset LLC in West Hollywood
Lien Amount: $2,695,992.60
Claimant: Abba Distributors
Hiring Party: Charles Pankow Builders
Property Address of Lien: 9040 Sunset Blvd, W. Hollywood
Property Owner: 9040 Sunset LLC
Abba Distributors, a lumber distributor, had the third largest construction payment dispute of the month in Los Angeles County, against Charles Pankow Builders. For this project on Sunset Strip in West Hollywood, Abba Distributors provided $2.7 million worth of doors, frames and other miscellaneous hardware for the on the jobsite owned by 9040 Sunset LLC.
LA’s Sunset Strip, a hotspot for shopping and nightlife, has been a hotspot for construction of late, with mixed-use projects slated for 2021. Abba was hired to work on the latest edition to the building. In December 2019, the Sunset Strip was named a historical landmark per the city of West Hollywood. Some of the developments notable music venues include Whiskey A Go Go, The Viper Room, The Roxy Theatre, and Sunset Marquis.
4. $2.3 million lien against GS Neptune Marina Apartments in Marina Del Rey
Lien Amount: $2,356,039.37
Claimant: JPI Construction Inc.
Hiring Party: Johnstone Moyer Inc.
Property Address of Lien: 1400-14126 Marquesas Way, Marina Del Rey, CA
Property Owner: GS Neptune Marina Apartments, LLC
JPI Construction Inc. filed a mechanics lien for $2.4 million in unpaid bills. Johnstone Moyer, Inc. hired JPI to conduct drywall work on the GS Neptune Marina Apartments jobsite in Marina Del Rey.
The Contractor Payment Profile for Johnstone Moyer, Inc. currently assesses them a high payment risk, with 2 recent liens, both on projects in Marina Del Rey.
JPI Construction is a full-service drywall contractor that operates out of San Diego, CA. JPI Construction’s main list of services include drywall installation, metal framing and project restoration. In this specific lien case against GS Neptune Marina Apartments, LLC, JPI Construction furnished metal stud framing and drywall installation.
The payment dispute was over JPI’s work on GS Neptune Marina Apartments, a complex of luxury homes that range from one to three bedroom floor plans. These are seaside apartments that have 95,000 square feet of indoor and outdoor amenities.
5. $2.2 million lien against Palmdale Health & Wellness Center in Lancaster
Lien Amount: $2,289,232.92
Claimant: Toneman Development Corporation
Hiring Party: Palmdale Health & Wellness Center, LLC
Property Address of Lien: 44241 15th Street West, Suite 101, Lancaster, CA
Property Owner: Palmdale Health & Wellness Center, LLC
Palmdale Health & Wellness Center hired Toneman for general contracting services on a new medical office building. Unfortunately, they appear to have skipped out on the $2.3 million bill. Toneman, in response, filed the fifth largest lien of the month in LA County.
TDC specializes in project management, general contracting, design/build, and construction consulting. Toneman oversaw construction of this 3 story medical office building for Dr. Eugene C. Rajaratnam, a urologist with “certifications in anti-aging and regenerative medicine.”
Los Angeles payment disputes reach a cool $52M
While most months in LA County have drastic lien amounts, the totals for August weren’t as jaw dropping as we’ve seen of late in southern California. Overall for August, 348 different companies filed 497 liens for a total of $52.4 million. On average, each company that filed a lien in August missed out on $150,000. The smallest lien filed in August was for just $120.
Fortunately for LA County, there’s a downward trend in lien totals over the past three months. In June of 2019, the total lien amounts filed went for $109 million! In July of 2019, the total liens equaled to roughly $70 million. Thus, over the course of these three months, LA County has seen about a $30 million decrease in lien totals each month.
Also in August, the infamous Oceanwide Plaza project, with Lendlease overseeing general contracting, was not on the list. Since June, this nightmare of a construction project has littered the biggest liens coming out of LA County. Hopefully, things have begun to smooth out for this mixed-use complex directly across from the Staples Center in downtown LA.