We successfully guided the owner of a substantial project to completion amidst a multimillion-dollar dispute, enabling it to meet a critical deadline for a single tenant to occupy the entire mid-rise building. The project – conversion of 80,000 sq/ft. retail space into loft offices with retail, restaurant and rooftop amenity space – faced significant challenges because of design, construction and bankruptcy issues. Together, they resulted in cost overruns and mechanics’ liens exceeding $650,000, with the risk of many more. Adding to the complexity were the need to satisfy not only the owner’s full-building tenant, but also its lender, title insurer, escrow trustee, and investors. Our strategic approach involved creatively restructuring the guaranteed maximum price (GMP) construction contract into a fixed-fee arrangement, while compelling the general contractor to either absorb losses or negotiate reduced subcontractor payments while obtaining the mechanics lien waivers and sworn statements required not only by the state’s Mechanics Lien Act, but necessary to cause the title insurer and escrow trustee to green light release of the lender’s funds required to complete the project. This workout and settlement agreement, coupled with a multi-stage payment plan, led to project completion, prevented lease default, and secured long-term warranties, indemnification, and other commercial and legal protections for the owner, which profitably exited its investment as planned. We used mediation – but avoided litigation – to achieve this win for our client. This highlights the firm’s ability to navigate multifaceted construction disputes, protect owner interests under challenging circumstances, and achieve key project milestones despite unforeseen obstacles, without unnecessary litigation.
