Despite marketing the promise of consumers’ abilities to “create the moment” at its establishments, a high-profile “entertainment district” development in Savannah, Georgia is having a hard time “creating the moment” it would like to.
Amidst the development of four projects as part of the Plant Riverside District Development, owners Plant Riverside, LLC and Kessler Condo Declarant, LLC are seeking significant damages from general contractor Hunt Construction Group, Inc. as part of a legal action filed on August 18, 2021.
The owners are requesting a total of $22,000,000 — claiming that, despite an original completion period of only two years, Hunt Construction has been inefficient up to the point that over four years have passed since work began.
The legal claim noted that “Hunt’s gross mismanagement of the work has caused Hunt to be well over a year late in achieving substantial completion on each of the four projects (ranging from 398 days late on two of the contracts to an anticipated substantial completion that is over 550 days late on the other two contracts).”
The amount requested by Plant Riverside and Kessler Condo includes “substantial costs and damages incurred as a result of hundreds of days of delay,” as well as the reimbursement of “an additional amount in excess of several million dollars.”
Additionally, the action seeks to have construction liens filed by Hunt Construction against the property declared invalid, with the owners noting that the liens “should be dissolved and or released giving effect to the representations Hunt made in its statutory waiver and releases acknowledging the Owners’ payments in full, and waiving and releasing the claims Hunt later asserted in its lien claims.”
The Plant Riverside District was developed by hotelier Richard Kessler, and officially opened to the public in July 2020, with the $375 million development anchored by a “locally owned and operated” Marriott hotel alongside other attractions and amenities.
“Plant Riverside District is my career legacy and gift to my hometown of Savannah,” said Kessler at the time of the development’s opening to the public. “The project brings new life to Savannah’s riverfront with world-class entertainment, curated galleries, over a dozen dining options and jaw-dropping natural science exhibits for all ages. It’s truly a unique visitor experience and the first of its kind in the southeast.”
Developers and city officials alike are hoping that the project will be a success. According to the Savannah Morning News, “The project is expected to eventually create upwards of 700 jobs and generate an estimated $30 million in taxes for the city of Savannah over the first 10 years of operation.”
All 4 projects within the development have seen substantial construction issues
The dispute stems from four specific contracts between the owners and Hunt Construction: the “Historic Building” project, the “Three Muses” project, the “West Hotel” project, and the construction of a parking garage on the site.
As per the owners, the Historic Building project involved the “adaptive reuse of the historic Plant Riverside power plant, renovating and transforming the historic structure into a luxury hotel with 163 luxury guestrooms and amenities”
The project additionally includes two restaurants, a rooftop lounge, a mall area with kiosks and natural science exhibits, and an underground tunnel that connects it to the West Hotel and Three Muses projects.
Three Muses involved constructing three new connected hotel buildings directly to the east of the Historic Building project, including “141 luxury guestrooms, a rooftop bar and patio, as well as surrounding site work with pavilions, kiosks and other amenities.” The West Hotel project similarly added a new luxury hotel space to the west of the Historic Building, adding “115 nautically themed guestroom suites, a ballroom, pre-function space, a music venue, as well as a rooftop pool and bar.”
The final aspect of the dispute centers on the parking garage, a 488-space construction within the West Hotel which includes eight total levels above and under the ground “wrapped by the West Hotel’s 115 hotel rooms.”
For each of the contracts, Hunt Construction originally agreed to complete the project within 729 days of the work’s commencement. However, over time these estimates were greatly affected by change orders: the Historic Building and Three Muses projects saw their completion dates pushed back 174 days, while the West Hotel and parking garage projects were extended 413 days.
As the lawsuit notes, these changes weren’t enough to take care of the situation: “Even after receiving the generous time extensions under each of the Four Contracts described above, Hunt woefully failed to achieve substantial completion of construction within the amended contractual deadlines on all four projects, due to its gross mismanagement of the projects.”
The Historic Building and Three Muses projects reached substantial completion on June 19, 2020, which was 398 days after the extended deadlines given to the projects — and, the lawsuit alleges, Hunt Construction has yet to complete all of its obligations to the projects.
Similarly, despite the fact that their deadlines were extended by 413 days, Hunt Construction had yet to reach completion on the West Hotel and parking garage projects. According to the lawsuit, the projects will be over 550 days late under its current extended deadline.
Owners cite ‘recklessness, indifference, and gross negligence’ in Hunt Construction’s work
Beyond the significant delays felt on the project, the owners noted that Hunt Construction’s work simply was not up to par.
“For more than two years Hunt’s recklessness, indifference, and gross negligence in failing to perform surface water management and dewatering resulted in surface water pouring into and remaining in the Mass Excavation, stalling construction work in the Mass Excavation, and delaying the West Hotel and Garage Projects,” the owners’ lawsuit noted.
“Despite the obvious inadequacy of Hunt’s surface water management and dewatering in the Mass Excavation, Hunt needlessly delayed correcting the problem for a period in excess of two years.”
There were a number of issues that each individual project faced which the owners claim are the fault of Hunt Construction. The lawsuit notes that the company exhibited a “complete failure to coordinate and manage structural steel work” — for example, despite a contractual obligation to inspect the original Historic Building and create drawings of the existing conditions (so that newly made steel could be correctly fabricated to connect), the company allegedly failed to do this correctly.
The owners additionally note that “Hunt’s work on the four projects included a substantial amount of defective, deficient, non-conforming or incomplete items, reflecting a pervasive lack of oversite and management of the work by Hunt.”
According to the lawsuit, inspections of the guest rooms in the Historic Building and Three Muses projects revealed 18,220 items of “defective, deficient, non-conforming, incomplete, or entirely missing” work, which later grew to 19,509 items.
As per the owners, “The list of deficient and incomplete work had become so extensive on the Historic Building/Three Muses Projects that Hunt’s punch out work on the Three Muses took over four times longer than planned under Hunt’s baseline schedule.”
Additionally, the company allegedly failed to adequately handle the workforce needs of the project, struggling with labor levels throughout the process. The owners note that “Hunt needed
to engage hundreds of more workers than it did,” adding that “Because Hunt failed and/or refused to hire enough workers, each individual item of work took significantly longer to complete when compared to its planned duration under the project schedules.”
‘Invalid’ lien claims further complicated the situation for the project owners
According to the lawsuit, all of these problems were amplified by Hunt Construction’s filing of two liens on April 12, 2021 — liens that the owners claim are “invalid,” and which “continue to evidence its indifference to the Owners’ rights.”
Hunt Construction recorded a mechanic’s lien alleging $8 million in nonpayment for amounts included as part of the Three Muses project, while an additional $12 million claim was recorded against the Historic Building project, though the owners claim that both amounts have already been paid.
The owners claim that the liens filed “are both plainly false, as reflected in the representations Hunt made in the valid waivers and releases that Hunt executed prior to filing its invalid Liens.” In addition to the $22 million claim, the lawsuit is seeking to have the liens rejected.