Outpost construction site with California financial alert graphic

On July 29, 2021, a dispute over unreturned concrete framework led to a lawsuit against general contractor K.D. Stahl Construction Group, Inc., project owner Poway Property, LP, and developer Capexco US GP, Inc. — with PERI Formwork claiming a total of $408,153.20 in materials and nonpayment.

The dispute, filed by PERI Formwork Systems, Inc., centers around a mixed-use development in Poway, California located at 13247 Poway Road. 

The development, named “Outpost,” is intended to contain 53 residential units, what the companies call an “urban food hall,” and a 20,000-square-foot Crunch Fitness center, and was projected to cost $35 million.

PERI Formwork leases concrete formwork and shoring materials for construction projects. Typically, these forms are removed once concrete walls have achieved the necessary rigidity to stand on their own, allowing PERI Formwork to rent the forms to other projects. 

However, the company is claiming that after entering a written agreement to lease its formwork for K.D. Stahl Construction’s work, PERI was abruptly terminated from the project and not allowed to retrieve its property.

According to PERI Formwork’s complaint, it delivered formwork to the Outpost development in March 2021 — at which point K.D. Stahl Construction would neither “enter into a lease to rent the Property from PERI, [return] the Property, [nor] allow PERI access to the Project to repossess its Property.”

PERI Formwork notes that, instead, “Poway and Capexco continue to use PERI’s Property, having converted it to their own use and benefit, without PERI’s permission, without a contract with PERI, and without compensation to PERI” — clearly stating that K.D. Stahl Construction, Poway Property, and Capexco have no claim to the materials.

The claim requests the total value of the materials if not returned to PERI Formwork — $329,687.70 — as well as “ all costs associated with PERI’s efforts to repossess the Materials.”

Additionally, the company is requesting $78,465.50 in past due invoices dating from July 10, 2020, to June 10, 2021, as well as “all rental amounts accruing thereafter until the date the Materials are returned.”

The Outpost has long been a major focus for Poway

Regardless of the problems experienced by the project, the city of Poway — a suburb of San Diego — has prioritized it as a major part of its expansion and development.

“This project will be a catalyst for achieving” the city’s goal of having a traditional town center, according to Poway Mayor Steve Vaus. “Outpost will offer new places to live, work, and play while helping fuel the city’s economy.”

“Outpost marks an important milestone in Poway’s history that we hope will become a model for revitalization and creating a walkable downtown district for Poway,” said Capexco president Trent Claughton in 2018. “It brings needed housing and compelling new food and fitness concepts to Poway in a vibrant live, play and work mixed-use development.”

The city’s proximity to San Diego adds significant appeal to the development, as well. “The appeal of the property is the multifamily being built alongside the retail,” added Paul Rahimian, Parkview Financial’s CEO. “The Poway Corridor is growing and this property will provide more food options for the area, as well as the new apartments being built.”

Lenders view the project as lucrative, as well. Prior to the project’s launch, the project’s partners received a $31.9 million loan in order to help fund the $35 million cost.

However, the project has hit a number of significant hurdles even besides the claim by PERI Formwork, putting the development in more jeopardy than those involved may have expected.

City officials originally hoped that the Outpost would be completed by the middle of 2020, but saw the time period come and go as a result of the COVID-19 pandemic. At this point, it’s unclear what the outlook is for the development, with Poway City Manager Chris Hazeltine saying “There’s a lot going on between The Outpost and [other Poway developments]…We’re tracking that they’ll be done in various forms by next year.”

In August 2019, the project had to push its completion back to fall 2020, despite Capexco originally claiming that the project would wrap up in fall 2019.

The last update directly from K.D. Stahl Construction — which previously released updates throughout the project’s development — came on August 31, 2020, with the company noting that it had “poured the final section of the second level deck for the underground parking structure at The Poway Outpost.” Despite previously saying that it would “be updating as [it continues] to make progress,” no further updates have come.

Poway Property also received a loan from the US Small Business Administration in July 2020 as it attempted to recover from the COVID-19 pandemic.

The project has faced a number of mechanics liens — and threats of liens — in the past months, as well. Between March 1, 2021, and May 27, 2021, at least seven liens totaling $976,330 were filed against K.D. Stahl Construction and the Outpost project, as per Levelset data — with an additional lien threat of over $10,000 in April 2021.

On top of these issues with nonpayment, Poway Property is named as a party in at least 10 ongoing court cases with contractors in San Diego County, further accentuating the problems that the Outpost project may be facing. 

The cases range in filing date from February 2, 2021, to July 19, 2021, and include charges of breaches of contract, property claims, and miscellaneous collections. It’s currently unknown how much money is involved in the claims, as all are still ongoing.

One of the actions, filed on June 4, 2021, actually comes from general contractor K.D. Stahl Construction, making a claim for breach of contract against Poway Property.