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Multiple Lawsuits and Liens Piling Up Against FaulknerUSA As It Races
 to Finish the 1,003 room Grand Hyatt San Antonio

By Melissa S. Monroe, San Antonio Express-NewsMcClatchy-Tribune Regional News

Jan. 19, 2008 - Problems keep mounting for Austin-based general contractor FaulknerUSA, which is overseeing construction for the new downtown convention center hotel.

Several lawsuits have been filed against FaulknerUSA in Bexar County claiming breach of contract. And more and more subcontractors have filed liens against the property at 600 E. Market St.

In addition, some subcontractors have said they filed claims with FaulknerUSA's bond company, Safeco Insurance Company of America, and have named Hotel Investments LP in lawsuits. Hotel Investments is an ownership group that consists of FaulknerUSA, Hyatt and Marathon Real Estate.

A partial list from county documents, company officials and attorneys shows subcontractors have made claims amounting to $19.6 million.

One recent contractor, Kathryn Carlisle, president of Cadit Co. Inc., said she wasn't getting any response from FaulknerUSA regarding the $650,000 she claims the developer owes her company.

"We never ever filed a lien on a project, and my company has been in business since 1996 and has worked on some major projects," Carlisle said. "If there was an issue with a contractor, we always worked it out; and Faulkner is not trying to work it out. I owe real people real money, but FaulknerUSA is probably hoping I take less." FaulknerUSA spokesman Bruce Kates said the focus for his company is on completing the job and turning over the keys to Hyatt, which will operate the hotel.

"Everything going on right now is working to get to the finish line and getting the hotel open," Kates said. "Any of these alleged disputes will take place at another time after the opening."

FaulknerUSA maintains the hotel will be ready for the planned opening on Feb. 6. But recently, Hyatt issued a statement saying: "While the developer FaulknerUSA states that it can be completed by then, we at Hyatt believe it is more prudent to allow three additional weeks of finish-out and training to ensure a true Grand Hyatt experience for our guests when we open for business."

The 37-story Grand Hyatt San Antonio will have 1,003 rooms and 115,000 square feet of indoor/outdoor meeting space, adjacent to the Convention Center.

FaulknerUSA and Safeco officials say it's not unusual to have disputes on a project this big, but other industry experts claim the project has been in trouble for a while.

Doug McMurry, executive vice president of the local chapter of the Associated General Contractors of America, said at a recent contractors leadership conference he asked experts for opinions on the Grand Hyatt.

Most said the project has "crossed the normal threshold a long time ago," he said. McMurry said it's noteworthy that the claims are not just coming from one or two contractors, but from many.

"There's a whole lot to be said about selecting the right general contractor on the front end," McMurry said. "Many of the problems can be traced back to the selection process." In addition to the contract disputes, the family of 24-year-old Joseph Montez filed a wrongful death lawsuit against FaulknerUSA in late November. Montez fell 20 stories to his death from a construction elevator while working on the project.

And last summer, FaulknerUSA's attorneys filed a lawsuit in Travis County against Les M. Pinter and former FaulknerUSA executive William H. Ferris, stating defamation, fraud and civil conspiracy.

Both Pinter and Ferris were officials at U.S. Structural Concrete Inc., which was a subcontractor for FaulknerUSA. They both resigned from the company and contested the lawsuit.

GRAND HYATT CLAIMS

These claims are in the form of either a lawsuit or a lien on the property.

--United Forming of Austell, Ga., nearly $5 million

--K.S. Persyn Commercial Plumbing and Utilities of Castroville, just over $4 million

--Lone Star Interiors Inc. of Austin, about $4 million

--Bonds & Associates of Hattiesburg, Miss., $2.5 million

--Formwork Services Inc. of Houston, $909,000

--Alamo Iron Works of San Antonio, $700,000

--Cadit Co. Inc. of Roanoke, Va., $650,000

--Alpha Insulation & Waterproofing of Marietta, Ga., $400,000

--J.P. Hart Lumber Co. of San Antonio, $350,000

--Holloman Corp. of Schertz, $312,743

--Lone Star Rebar LLC of Fort Worth, $300,000

--Pumpco Inc. of Denver, $145,000

--A. Gonzalez & Sons Inc. of Somerset, $132,273

--Construction & Highway Supplies of Texas of San Antonio, $68,828

--Texas Outlaw Inc. of Atascosa, $54,000

--United Tool & Fastener of Houston, $53,338

--Texas Cutting & Coring LP of Schertz, $10,805

Source: Bexar County documents, attorneys, company officials

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Copyright (c) 2008, San Antonio Express-News

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