Paying for things while using Amazon is dangerously easy. Seriously, one-click ordering makes buying an almost-entertaining experience (until, of course, you see the credit card bill…). As easy as payment can be through Amazon, payment in construction is still a struggle – even when an Amazon warehouse is involved.
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New York Liens Filed On A Future Amazon Warehouse
Thanks to Patch.com who posted the original story.
The project where liens were filed is a massive one, so let’s talk about the property first. After, we’ll discuss the disputes in play, as well as some New York lien law particulars that may affect the lien claims.
The mechanics liens were filed on a massive industrial park on Staten Island. The area was actually once pegged for a NASCAR stadium, but is now set to be home to four giant warehouses developed by Matrix Development Group. The warehouses will be tailored for the needs of large retail and logistics companies. Amazon is one of the companies that will inhabit the park.
Amazon is obviously the biggest name tied to the project. Plans and reports indicate that this Amazon site will be on the cutting edge – according to Bloomberg, technology and robotics will assist (human) in fulfilling Amazon orders in the northeast. IKEA has also been tied to the industrial park, where it will strut a nearly 1M square foot distribution center alongside Amazon’s facility.
Mechanics Liens Filed
Matrix Development Group owns the property in question, and apparently, they failed to pay their contractor on the project BKS-NY quite a bit of money. In fact, BKS-NY claims that sums have gone unpaid for the past 3 years to the tune of $7.2M. An equipment renter, Foley, also filed a lien on the project after missing out on nearly $450,000. Finally, Local 282, which is a union representing workers on the project, also made a claim for payment at just under $150,000.
Deadlines and Extensions for New York Liens
On projects this large, we often note that the chances of lien foreclosure are extremely remote – sort of like how there was literally zero chance that Beyoncé and Jay-Z would let their lien cause any problems. But lien foreclosure deadlines do exist, and if payment isn’t made prior to that deadline, a lien will be enforced.
In New York, the deadline to enforce a mechanics lien is one year after the lien was filed. But NY has some tricks up it’s sleeve. New York is one of the few states where a lien extension is available to postpone the foreclosure deadline. Upon filing with the recorded, a mechanics lien can be extended for a full year. A second extension is possible, too, but that’s a more stringent process. A second lien extension in New York can’t just be filed – it must be approved by a judge. However, there is some controversy as to how the timeline for a second lien extension will be handled.
On projects where a lien foreclosure is unlikely, or when an owner or GC assures a claimant that any liens will be bonded off, it can almost feel like filing a lien is pointless. But that’s not the case! The strength of mechanics liens lie in the worst-case scenario for the property owner. Nobody likes liens (not even those filing them), but liens do a great job of securing payments.
While there’s certainly a chance that this development is the next infamous project failure, I’d hardly expect these liens to completely derail the project at hand. More likely, this lien will go the way of the recent Intel lien up in Oregon. The dispute may carry on for a while due to long deadlines and lien extensions, but ultimately, I think the developer and these unpaid parties will sort everything out.