Hard Rock Hotel New Orleans after partial collapse

The crumbled wreckage of the Hard Rock Hotel New Orleans still sits largely untouched on the site where it partially collapsed 10 months ago on October 12, 2019. Of the three workers killed in the construction catastrophe, the body of only one have yet been removed. 1031 Canal Development, the developer in charge of the hotel’s construction, now faces multiple mechanics liens from unpaid contractors, lawsuits, and backlash from the community, as well as fines and other charges from the City of New Orleans.

On October 20th, an effort was made to demolish two cranes that remained standing atop the heap. One crane sits speared into Rampart Street and the other overhangs Canal Street. Since then, a host of delays and concerns for the remains of the workers that are still trapped in the site have prevented the demolition of the building. The situation has been unresolved for 10 months, with many interested parties heavily affected.

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$4.6 Million in Lien Claims on Hard Rock Hotel

The Hard Rock Hotel New Orleans was a massive, $85 million project with 50 different subcontractors working on the job. The general contractor on the construction project, Citadel Builders, was hired by property owner 1031 Canal Development.

In the aftermath of the tragedy, an OSHA report detailed the failures of multiple contractors on the project that contributed to the building’s collapse. A City inspector resigned after revelations that they falsified inspection reports.

Meanwhile, the property owner and developer faces a growing number of payment disputes. As of now, there have been 10 mechanics lien filings on the project. The total amount claimed between the unpaid contractors is just shy of $4.6 million.

Hub Steel: $2 million

Hub Steel is a Florida-based company that was hired by Citadel. As a subcontractor on the project, Hub Steel has filed a mechanics lien against 1031 Canal Development, the owner, for the amount of $2,025,622.56 on May 1st, 2020.

Spider Division: $1.2 million

Spider Division of Safeworks Holding is a Washington-based company hired on the project by Citadel. After going unpaid after the collapse, Spider filed a mechanics lien against 1031 Canal for the amount of $1,194,070.21 on January 24, 2020.

Kolb Grading, LLC: $800K

Kolb Grading, a Missouri-based company, filed a mechanics lien in the amount of $790,300.59 on February 19, 2020. Payment is due to Kolb from the owner (1031 Canal), the GC (Citadel), the surety (Travelers Casualty & Surety Company of America), and the builder’s risk insurer (Crawford Global).

All Crane Rental of Louisiana, LLC: $275K

1031 Canal, Travelers, and Citadel are allegedly indebted to All Crane for an unpaid amount of $275,873.10. All Crane filed their claim on March 6, 2020.

Moses Engineers, Inc: $95K

Moses Engineers, the chief mechanical engineers on the project, have filed a mechanics lien against 1031 Canal Development to the amount of $95,327.60. This is one of the most recent mechanics liens, filed on July 27, 2020.

Other payment claims

Other subcontractors have filed smaller value claims:

  • Spider Division of Safeworks Holding submitted a Statement of Amount Due under the Public Works Act to the amount of $120,115.19 on December 13, 2019.
  • Best Block, LLC filed a lien for $82,651.57 on December 16, 2019.
  • Beverly Construction Company filed a lien against Citadel for $15,878.45 on June 5, 2020.

1031 Canal hit with $5 million judgement lien from the City of New Orleans

The City of New Orleans sent a notice of Administrative Judgement on August 3rd that found 1031 Canal Development guilty of 15 violations to public health and safety. Each violation incurs a $500 fine. Along with the hearing fee and recordation fee, that brings the total due to $7,705.

According to the notice, these amounts are considered a city lien on the property, and failure to satisfy the payments and show proof the violations are being corrected could result in punishments up to imprisonment.

In addition, the City states the security due from 1031 Canal stands at $5,007,575.

Developer Responds to City Claims

In April 2020, 1031 Canal Development filed an Emergency Motion for a stay of the judgment against them, which ultimately appears to have failed.

In broad strokes, 1031 Canal claims the circumstances of the code enforcement are “unusual, to say the least.” The statement asserts that Griffin, a company selected by the City to implode the cranes, failed to carry out their duties. After that, the City is claimed to have chosen Griffin to demolish the building itself.

1031 claims to have expressed reluctance to hire the contractor again. The day after, the City of New Orleans carried out inspections for “House Code Violations,” which 1031 Canal wasn’t aware of. The 1031 Canal legal team deemed these code enforcement proceedings to be “farcical” and that the City tried to place them into a “trick bag.”

Later on, 1031 Canal argues that they had taken substantial steps towards completing the requirement to demolish the building in the forms of applying for permits, executing a contract for demolition, securing funds for demo from their Builder’s Risk insurer, and more. They claim the city was aware of these measures yet still pressed for demolition activities to begin on April 29, 2020 without defining a contractor or concrete plan to carry it out.

Lastly, 1031 Canal holds that the bond amount of $5,007,575 is unrelated to the abatement order, and therefore unlawful should be vacated. They argued they do not have the funds to pay a $5 million bond, and that the bond could send 1031 Canal into bankruptcy, stalling the building’s demolition even further.