Panorama Tower Contractor Sues Developer Florida East Coast Realty
Fired contractor Tutor Perini Building Corp. says it's owed millions of dollars for work accumulated because Florida East Coast Realty was late turning in project plans but gave no deadline extension.
December 27, 2017 at 01:35 PM
5 minute read
The fired general contractor that supervised construction of Panorama Tower for three years as it rose in Miami's Brickell District is suing developer Florida East Coast Realty, alleging millions of dollars in unpaid work.
Arizona-based Tutor Perini Building Corp. claims Florida East Coast Realty was late turning in project designs, revised plans several times and turned in changes as recently as October, creating more work for Tutor Perini without giving a deadline extension, according to the Nov. 28 complaint.
Florida East Coast Realty, founded and headed by prolific South Florida developer Tibor Hollo, is building the tower at 1101 Brickell Ave., which at 85 stories would be the tallest residential building on the East Coast south of Manhattan.
Tutor Perini, part of the publicly traded Tutor Perini Corp., one of the nation's largest general contractors, was hired to start work on June 9, 2014, according to a signed agreement.
The $255 million contract — to cover subcontractors and suppliers, Tutor Perini's profit and $15.5 million for the company to manage the project — was based on designs submitted May 14, 2014, according to the complaint.
The contract was supposed to be modified once final designs were delivered, and the $15.5 million management cost could be increased, according to the complaint.
But Florida East Coast Realty missed the July 8, 2014, deadline to turn in final designs and added multiple changes, according to the Miami-Dade Circuit Court lawsuit.
Katz, Barron, Squitero, Faust, Friedberg, English & Allen attorneys R. Steven Holt, John Squitero and Andrew J. Foti in Miami filed the lawsuit.
Phillips, Cantor, Shalek & Pfister attorney Gary Phillips in Hollywood represents Florida East Coast Realty.
The breach of contract claim maintains Tutor Perini is owed more than $12 million, and the complaint lists lien foreclosure, quantum meruit and abandonment of contract/cardinal change claims as well.
The design changes increased the cost from $255 million to $362.5 million, according to the complaint.
The deadline for Tutor Perini to obtain temporary certificates of occupancy was 42 months after June 9, 2014, according to the complaint. That placed the deadline on Dec. 9. A certificate of occupancy is the last official step before people can move in.
“There were hundreds if not thousands of changes required by the various design revisions,” the complaint said. “The late, piecemeal and incomplete design, the numerical and dollar volume of changes, and the nature of the changes collectively destroyed any hope of effectively managing the project and obtaining the final TCOs (temporary certificates of occupancy) by the contractually required dates within the lump sum amount … specified in the contract.”
On Sept. 30, Tutor Perini was fired, according to the complaint. On the same day, it filed a lien against Florida East Coast Realty for $9.7 million, records show.
The developer said Tutor Perini's lawsuit is a defense tactic.
“We believe Tutor Perini filed the lawsuit inappropriately in Circuit Court as a preemptive strike because they knew that once they were terminated, delays occasioned by them and their failure to properly supervise and monitor the job would come to light. In addition, they either failed to properly read the contract or completely ignored the provisions in the contract which require arbitration,” Florida East Coast Realty said in an emailed statement.
The developer said it directly paid the subcontractors, reducing the lien to almost zero. And the company added it will take action against Tutor Perini.
“Once the appropriate forum has been determined, we anticipate filing claims against Tutor Perini for damages in excess of $25 million,” the developer said.
Among the changes were at least 12 civil design supplements with the last one provided Oct. 13, at least 31 structural design supplements with the latest provided on Oct. 2 and at least 47 architectural design supplements with the latest delivered Aug. 28, according to the lawsuit.
The design additions translated to redesigns, such as adding a lounge on the 81st floor, according to the complaint.
Tutor Perini also alleges Florida East Coast Realty hired its “favored” subcontractors with which it had a “deal,” but they had performance problems, according to the complaint.
Florida East Coast Realty “expressly requested” Tutor Perini to increase project supervision to finish on time and “repeatedly promised that it would 'be fair' and 'take care of' ” the contractor, according to the complaint.
Tutor Perini said it put in extra work, kept the project moving on time and expects the certificate of occupancy to be issued in January, according to the complaint.
Panorama Tower should be completed in March, project representatives said.
It will have 821 luxury apartments, a 208-room hotel, more than 100,000 square feet of medical offices, more than 50,000 square feet of retail and restaurants and a 2,000-space garage, according to Florida East Coast Realty's website.
Hollo has been a South Florida developer for at least 60 years, building some of Miami's landmark buildings. He built the first high-rise office building in Brickell, Rivergate Plaza, in 1969; developed the Omni area in the 1970s; and finished the first new high-rise apartment building of the millennium, Bay Parc Plaza, in 2000, according to the company's website.
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