Since July 2019, nearly two dozen mechanics liens have been filed against 511 Meeting Street, a luxury apartment complex in downtown Charleston, South Carolina. The general contractor on the project, Aspen Heights Construction, was also named in a majority of the liens. In total, multiple contractors filed claims worth $5,416,704.69.
511 Meeting Street is a massive residential project undertaken by Spandrel Development Partners, a large real estate development firm based in Charleston. They have executed projects across the Southeast and New York City.
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The luxury apartment project, covering 75,000 square feet, includes 221 rental apartments, 2 levels of parking, and retail space. The price tag on the project totaled $165 million, with construction beginning in May 2017.
The construction project was started to meet the rising demands for housing in downtown Charleston. According to the Charleston Housing Authority, the South Carolina city is predicted to reach 1 million residents within the next 10 years.
Multiple Contractors Claim More Than $5 Million
Payment disputes have been an ongoing problem for the project. AJP Painting Services filed the first lien against the property back in July 2019 for $264,200. According to lien filing documents, the initial contract price for the materials and labor was $893,725. AJP allegedly received a total of $498,150 before they filed the mechanics lien claim.
The latest and largest mechanics lien was filed by Krueger Construction on June 25th, 2020, for a total of $784,766.83.
Other high-dollar mechanics liens filed against 511 Meeting and Aspen Heights include:
- $361,374.81 from F&D Electric of South Carolina
- $665,753.15 from Whirlpool
- $567,999.10 from MH Masonry & Associates
- $695,482.35 from JE Dunn Construction
- $347,265 from Strickland Waterproofing Co.
The GC on the project, Aspen Heights, LLC, has had its fair share of liens filed against them in the past. In 2019, Trio Electric filed a mechanics lien for $698,000 against Aspen Heights on a construction project located at 1301 S. Capital of Texas Hwy #201 in Travis County, Texas. More recently, Aspen has had a threat of lien for $60,000 on a construction project in Knoxville. Along with that, Aspen defaulted on a $50.6 million loan for a student living complex in Columbia, Missouri in 2019.
Rising Demand Can Increase Payment Risk for Contractors
The National Multifamily Housing Council predicted the country would need 4.6 million new apartments by 2030 in order to meet the rising demand. Along with that, future residents are migrating to smaller counties to find a lower cost of living, and the industry is seeing growth in cities just like Charleston.
An unfortunate truth is that the construction industry and development industry are unstable during times of rapid growth. This is mainly due to a struggle to keep up with demand, newfound problems with cash flow, scaling issues, and, of course, credit risks.
On top of that, construction projects are already very fluid, and oftentimes things don’t go exactly to plan. With the uptick in development and the sudden shock of the pandemic, problems are no surprise.
Because projects move slowly, it yet may be too early to accurately measure the impact of the coronavirus on real estate development as a whole.
However, with the rising cost of materials and labor and developers struggling to break ground on new construction, the industry may see more high-dollar liens filed against large real estate development projects like 511 Meeting Street.