Three New York liens on a public project are calling for over $2.2M in payment. The liens very well could be a result of the uncollaborative payment system in the construction industry. However, SUNY Polytechnic Institute, which is involved in an investigation by federal prosecutors, is a party to the project.
The Project
It’s easy to forget that states are in competition for businesses. Whether it be to increase tourism, provide jobs for their citizens, or to increase tax revenue, state governments regularly sweeten the pot to induce businesses to come to their state. Examples include the Louisiana Motion Picture Tax Credit and the California Competes Tax Credit which both invite industry to their state by way of tax credits. For a construction manager, perks like these can go a long way.
In New York, the state is funding a manufacturing plant for Soraa, Inc. in order to bring Soraa to Syracuse from California. As noted in this article from syracuse.com, the project has hit setbacks recently resulting in unpaid workers and three mechanics liens.
The project, which is being directed by SUNY Polytechnic Institute, calls for $90 million in state funding for the LED lighting plant. Soraa is a producer of energy efficient, high quality LED lighting. The company actually produces LED technologies used in drones, a topic that we have discussed recently. Ultimately the goal of the Soraa facility project will be to create hundreds of jobs for local residents, establish New York as a leader in green technology, and provide tax revenue for the state going forward.
From the onset there were serious questions associated with the facility, but it was approved anyway. It appears that those skeptical of the large project have been validated by recent events. Many of the contractors and suppliers working on the facility haven’t been paid in months. As a result of the payment issues, three mechanics liens have been filed on the property for a little over $2.2 million. Liens were filed by JPW Structural Contracting ($1.2M), Nortek Air Solutions ($922,000), and Metl-Span ($126,000).
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The “Setback”
Unfortunately, ethics and construction don’t always go hand in hand. The industry is prone to fraud and scams, and it appears that SUNY Polytechnic Institute and New York Governor Andrew Cuomo’s office may be at the center of some impropriety.
In May, federal prosecutors subpoenaed the Governor’s office for information on individuals and companies involved in state projects. The implications are far reaching, but the investigation is essentially looking into improper benefits used in state construction and real estate projects. The probe is investigating the Governor’s office for information and communication relating to a wide array of projects, and some involve SUNY Polytechnic. Here’s an article from Buffalo News with more information on the investigation.
But how does this involve the Soraa project?
It may or may not. However, there have been unspecified reasons for delays in payment. While officials claim there is a payment schedule in place to get the project back on track, it may not be that simple. Some other large SUNY Polytechnic projects have faced similar issues since U.S. Attorneys began their investigation. The investigation continues to heat up, and the longer it has gone on, the closer it has gotten to Governor Cuomo. It appears that corruption may have affected the granting of public projects in New York, and if that is the case, this project may be implicated. As far as reasons for nonpayment go, potential government corruption is a pretty good excuse. Unfortunately for the contractors and suppliers involved, they still must seek recovery through regular legal channels.
New York Liens
While procedural requirements are strictly construed in lien law, New York courts have shown mercy in the past. Lienholders in New York have been given a little more lien-iency than other states. However, lienors working on public property have not always fared well in New York. Regardless, it is important to understand the intricacies to New York lien law. With the large amounts of their liens, these lienholders should be as vigilant as possible in protecting their lien rights.
A good start might be to head over to our FAQs for New York liens and to read our other posts on New York liens.
