Contractor, Real Estate Developer in $4.2M Dispute

Charges fly as two companies working on building a luxury hotel don't see eye to eye.

📅   Fri March 04, 2016 - Northeast Edition


The website Bizjournals is reporting that MLB Construction Services LLC and Prime Cos. are fighting in court over $4.27 million the builder says it's owed for work on the Pavilion Grand Hotel in Saratoga Springs, New York.
The website Bizjournals is reporting that MLB Construction Services LLC and Prime Cos. are fighting in court over $4.27 million the builder says it's owed for work on the Pavilion Grand Hotel in Saratoga Springs, New York.

The website Bizjournals is reporting that MLB Construction Services LLC and Prime Cos. are fighting in court over $4.27 million the builder says it's owed for work on the Pavilion Grand Hotel in Saratoga Springs, New York.

MLB Construction, based in Malta, filed the lawsuit 11 months after the 48-suite luxury downtown hotel opened in May 2014.

The hotel is owned by Prime Cos. of Cohoes through a limited liability company called Lake Avenue Plaza.

MLB, which was hired as the construction manager-as-contractor, says it provided $11.79 million in labor and materials, but was only paid $7.5 million, according to a lawsuit filed in state Supreme Court in Saratoga County.

MLB, one of the region's largest general contractors, says it's owed $4.27 million plus interest since receiving its last payment in 2014.

Prime Cos. is one of the region's largest developers, with a portfolio that includes apartments, hotels, residential subdivisions and office/retail buildings.

Prime Cos. doesn't dispute it has paid MLB $7.5 million, but says the construction contract the two sides negotiated had a "guaranteed maximum price" of $9 million. The amount was later changed to $9.7 million due to eight change orders.

Prime Cos. says there were numerous defects in MLB's work that caused problems, including "a significant mold condition in the interior of the building" and "considerable rust" on the metal panels that are part of the exterior brick system, according to the lawsuit.

As a result, Prime Cos. says it had to do remedial work to abate the mold, pay for additional architectural services and will have other expenses. The firm says it suffered damages and is demanding it be paid at least $4.6 million.

Both sides are continuing to file responses in the case.

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