With major events impacting the state throughout 2021, Texas has seen a number of delays on construction projects — and significant lien claims by contractors have been common.
The end of summer is bringing with it many claims on work done in the spring, with a number following the state’s major natural disasters experienced during the first part of the year.
Texas disaster recovery leads to major lien claims
Interstate Restoration and Pennybacker Capital: $1,989,950.72
Disaster recovery has turned into a whole different type of disaster for general contractor and disaster recovery specialist Interstate Restoration, as their work for Texas-based real estate equity firm Pennybacker Capital recently resulted in at least four separate major lien claims — filings which claim a total of at least $1,989,950.72 in non-payment.
Specifically, the claims date back to disaster recovery services provided by Interstate Restoration in spring and summer 2021, with two projects beginning on February 21, 2021, and two more beginning on April 17, 2021.
Three claims — with one stretching from February 21, 2021, to March 14, 2021, one dating from February 21, 2021, to May 4, 2021, and the last going from April 17, 2021, to April 20, 2021 — are connected to what the affidavits list as labor and materials associated with disaster recovery.
Respectively, these first three claims were for amounts of $389,336.25, $640,614.17, and $500,000.
As per the filings, all three claims are connected to work done on Pennybacker Capital’s Ironwood Crossing townhome complex in Fort Worth, Texas.
Ironwood Crossing is marketed as being “Conveniently located near shopping and dining in North Fort Worth, Texas” and including “the upscale features you’ll love…A State-Of-The-Art Fitness Center, Resident Business Center, complete with Computers and Printer, Elegant Clubhouse, Sparkling Swimming Pool, and a great Playground for the young at heart!”
However, Google reviews for the development note a significant list of problems, with many alleging “careless and reckless” tenants, unsafe atmosphere caused by car thefts and “loitering,” and insect infestations — with one particular review simply noting “This apartment is unlivable.”
The final claim, for $460,000, notes that it involves disaster recovery from April 17 to May 19, 2021, provided at a property in Arlington, Texas.
These claims haven’t been the only problems that Interstate Restoration has had to deal with recently, either — records have shown that the company has had to make at least 76 separate lien claims in the past few months.
It’s highly likely that these issues are tied to the extreme number of disasters that Texas has had to deal with in 2021. Winter of this year saw Texas impacted by a significant storm that disrupted the state’s power grid and caused what may be the most monetary damage experienced in state history.
“All 254 counties will have been impacted in some way by the freeze,” said Independent Insurance Agents of Texas Director of Government Affairs Lee Loftis in February 2021. “That is just unheard of.”
Due to the significant amount of damage done all around the state — with some government officials expecting that the total damage could potentially exceed the $125 billion in damage from Hurricane Harvey — it’s likely that there may be more companies needing Interstate Restoration’s services, and possibly more storm-related liens to follow.
More Texas news: Texas Energy Company Bankruptcies Reveal Construction Debt
Seahawk Loading Facility continues to face payment issues
TAM Services Group, Inc. and NFG Energy Services, LLC: $708,214.81
F.E. Moran, Inc. Special Hazard Systems and NFG Energy Services: $892,115.31
Prior Levelset coverage of major Texas liens noted that a lien filed by Berry Contracting L.P. d/b/a Bay Ltd. was putting pressure on Max Midstream’s Seahawk Loading Facility. Now, just a few months after this roadblock, there are more claims.
TAM Services Group, Inc. filed a July 12, 2021, lien against the Seahawk Loading Facility coming to a total of $708,214.81, while July 16, 2021, saw F.E. Moran, Inc. Special Hazard Systems file for $892,115.31.
According to its lien, TAM Services’ claim stems from services that included “providing and installing the labor and materials necessary to coat, paint, and line storage tanks for oil and gas facilities.” TAM Services notes that it offers “Surface Preparation & Painting,” “Tank Coatings & Linings,” “Scaffolding Services,” and “Thermal Insulation” among its services to customers.
F.E. Moran’s claim notes that it provided design and materials for the project, and the company notes that its services provide “extensive knowledge of codes, proven design methodologies, and skilled installation crews offer you the highest level of fire protection.”
Max Midstream’s facility, a major oil pipeline in Texas’ Calhoun County, is reportedly 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.”
The claim notes that TAM Services’ work on the project ended on June 23, 2021, just a month after Bay Ltd.’s claim on the project. Due to the project’s place within the oil and gas industry, TAM Services noted that it is making an alternative mineral lien claim on the project.
A mineral lien is an equivalent of a mechanics lien — a payment recovery tool — for contractors on an oil and gas project. Veteran construction writer Dawn Killough notes that mineral liens “attach to the mineral rights, material, machinery, equipment, and/or leasehold interest in a property.” This lien type is especially prevalent in Texas, where oil and gas projects are plentiful.
The facility may have had its operations hindered by the lien filings, but it’s too early in the pipeline’s operating schedule to tell. Though the facility has already gotten oil moving, it hasn’t yet gotten to the most pivotal moment of the year for its shipping schedule — a moment that could show just how much the facility was held back.
Max Midstream President Todd Edwards noted that the facility was going to begin with test shipments of oil in May 2021, but that major contracts will be finalized in mid-October 2021. “People want to make sure there’s no glitches and everything works,” Edwards added.
Related: Pipe Fabricator’s $80M Texas Lien Adds to Permico’s Gas Pipeline Saga
Union Processing Systems still faces legal challenges years into construction timeline
Chemical, Refining, and Terminal Services, LLC and Union Processing Systems, LLC f/k/a TexCom Gulf Disposal LLC: $1,065,631.31
After multiple years of work on the project, Chemical, Refining, and Terminal Services, LLC made a June 23, 2021, lien claim on a number of underground waste storage wells owned by Union Processing Systems, LLC, with the claim coming to $1,065,631.31.
CRT offers industrial cleaning services for oil and gas projects, as well as services in inspection, construction, and other oil and gas services.
Union Processing — formerly known as TexCom Gulf Disposal — has been in a difficult position with the construction of its storage wells for a number of years.
According to The Courier of Montgomery County, “In 2005, TexCom acquired a 27-acre tract of land in Conroe for the purpose of developing a wastewater injection well facility,” applying to the Texas Commission on Environmental Quality for the purpose of getting a permit to drill more storage wells and burying waste classified as “nonhazardous.”
According to the former TexCom’s website, “The first well has been drilled and is ready for operation. The permits [for the well] allow for cumulative maximum injection of 350 gallons per minute, or 12,000 barrels per day.”
Despite a large amount of public pushback, the TCEQ voted in 2011 to issue a permit for the company to operate an underground landfill — one which the company’s opponents said “could contaminate aquifers which provide drinking water to millions of people in the region.”
Throughout the 2010s, the company struggled with legal actions over the facility. This recent lien has not been the first time that the company has dealt with lien claims on this project — or even from this particular company.
At one point in 2020, Union Processing apparently owed $2 million in non-payment on the project. CRT filed a prior lien on this project — Levelset’s Ian Cogswell noted in September 2020 that “CRT furnished labor and materials for the project from November 18, 2019 to December 8, 2019. After going unpaid, CRT filed a mechanics lien on July 13, 2020 for the amount of $1.2 million.”
Though Union Processing was able to handle at least a handful of its claims, clearly there is still work to be done in order for the company to clear the legal hurdles with its underground storage.