As major areas see heavy construction demand as the COVID-19 pandemic continues, many of the nation’s largest states are running into mounting issues with contractor payment.
Summer 2021 saw a number of projects impacted by significant liens — many in the multi-million-dollar range — as well as the issue of retainage.
Retainage is an amount of money that is withheld from a contractor or subcontractor during a construction project’s term — and it’s coming to the forefront of problems between contractors and owners in Texas.
The Pearl Apartments, Austin
Gulf Coast Community Builders, LLC and Koenig Lane Development Partners, L.P.: $6,298,101.73
After working on new construction for the Austin, Texas residential complex The Pearl, Gulf Coast Community Builders, LLC filed a lien claim on the property on May 14, 2021 — claiming a staggering $6,298,101.73 for its work on the project.
Of the total sum, the lien specifies that $3,405,707.67 is retainage.
When the project was announced in 2017, its estimated total cost was reported as being $48 million.
A 2017 article announcing the construction of the complex described the development as “A four-story 157,420-gross-square-foot parking garage that will be constructed of cast-in-place concrete will be situated to the rear of the apartment facilities in wrap-around style to screen it from view,” which “will have space for 462 motor vehicles and 24 bicycles.”
Reports from the time of the project’s announcement added that the complex’s additional amenities would include ”three courtyards that are enclosed on all sides by the apartment building design” and “a public trail/bridge.”
Gulf Coast Community Builders is a Texas-based construction management firm that “specializes in the multifamily sector.” As per its website, the company “is led by a group of industry veterans who have overseen the development of nearly 40,000 multifamily units throughout the southeastern United States…From affordable housing to high-end mixed-use developments, the GCCB team understands the dynamics of the multifamily market and is ready to work with you on your project.”
Gulf Coast Community Builders’ portfolio lists eight projects — all residential complexes in Texas — with its work on The Pearl specified as “New construction of [the] 341,116 s.f., 383-unit apartment complex.” According to the portfolio, work on the complex was intended to be finished in summer 2020.
Seahawk Loading Facility, Calhoun County
Bay Ltd., NFG Energy Services LLC, and Max Midstream Texas LLC: $1,442,256.91
The still-in-progress construction of a new oil transfer terminal for Max Midstream Texas LLC’s Seahawk Pipeline may be in danger of delay after Berry Contracting L.P. d/b/a Bay Ltd. filed a lien against the project on May 13, 2021 — with the company claiming $1,442,256.91 in nonpayment.
As per Max Midstream, the project’s estimated operation date is 2023, with Bay Ltd.’s construction work being done during January 2021 and February 2021.
Bay Ltd. noted that it provided piping, steel, and “other industrial construction materials,” and furnished equipment and labor that included “light and heavy construction equipment” as well as “skilled and unskilled craftsmen, operators, and supervision necessary for the construction of [oil] storage transfer facilities.”
Specifically, Max Midstream noted that the facility is being built to hold “620,000 barrels at Seahawk Terminal, Panamax-sized vessels up to 400,000 barrels, Loading arms at the liquids pier for both domestic and international vessels, [and] Four loading berths to service barges and ATBs.”
Additionally, the project’s construction will include an “office at Seahawk Terminal with 24/7 supervisory control and data acquisition (SCADA) operations oversight for the pipelines, export docks, and storage facilities.”
Todd Edwards, president of Max Midstream, said of the project that “Seahawk is strategically positioned to meet the local Eagle Ford demand in the US Gulf Coast region, and will soon be connected to the Gray Oak pipeline in a subsequent open season.”
“Along with the Calhoun Port Authority’s final approvals from Congress, and our public-private partnership to assist in the funding to deepen and widen the channel, to be completed in 2023, Seahawk’s assets will add value to its shippers, and the marketplace,” Edwards continued.
Strategically located between Corpus Christi and Houston/Galveston ports with direct access to the US Gulf, Intercoastal Waterway, and the Matagorda Shipping Channel.
Additional work may follow in the near future, as well. According to Max Midstream, “A public/private partnership to both deepen and widen the Port of Calhoun is currently underway with the state and federal authorities to accommodate both Aframax and Suezmax ships.”
Max Midstream purchased the Seahawk Pipeline and Terminal from Oaktree Capital in September 2020, working with the goal of “transforming Calhoun into an alternative to Houston and Corpus Christi for oil exporters.”
At the time, the prospect of significant construction was welcomed by officials at the Port of Calhoun. “We, the Calhoun Port Authority, could not be more excited about this project,’ noted Calhoun Port Director Charles R. Hausmann in 2020. “This will transform our port into a major oil exporting centre, and it will transform our area with new jobs and new growth. This is an exciting day for the Port, the community and the state of Texas.”
The Drake at White Rock, Dallas
Moss & Associates, LLC and The Lake View at White Rock, LLC: $1,782,608.28
The Drake at White Rock residential complex has already opened for renters in Dallas, but that hasn’t kept the project from construction issues. May 6, 2021, saw contractor Moss & Associates, LLC file a lien against project owner The Lake View at White Rock, LLC for a total of $1,782,608.28 over work done on the complex.
The lien specifies that, of the total of the company’s claim on the property, $1,396,240.55 is retainage.
Moss & Associates claims to have provided the “provision of labor, materials, and equipment necessary to complete the ground-up construction of a multifamily living complex” during its work on the project.
A May 2, 2019, press release from the company noted that it had been awarded a $28.52 million contract to construct the project for Northfield Development, LLC.
“We are excited to work with Northfield Development, LLC, in bringing this high-end project to the Dallas market,” said Moss & Associates Vice President Chris Dorman in 2019. “The project’s contemporary design works in harmony with the Lakewood neighborhood, and uses a great mix of construction materials to connect it with the natural beauty of White Rock Lake making it a great addition to the area.”
Moss & Associates has a significant national construction portfolio — which includes such significant projects as Major League Baseball’s Marlins Park, home of the Miami Marlins in Miami, Florida.
The Drake at White Rock complex markets itself as a place that “presents the best in amenities to our residents. From a luxurious pool lounge and deck to a premium fitness center with a yoga room, your relaxation and wellness are top of mind.”
However, some have complained construction has drastically affected the living experience — reviews of the complex left on Google note numerous issues connected to the complex’s ongoing construction, with one reviewer remarking that “The construction has been so bad at this place. The construction crew never cleans their mess.”
Another reviewer noted that “It’s been a super messy project and honestly I’m sure they have had problems because it’s taking them so long. If you move here, expect faulty construction.”