Hotel Online 
News for the Hospitality Executive



 
San Antonio Critics of Hotel Builder, FaulknerUSA,
Warn Fort Lauderdale Officials

By Scott Wyman, Sun Sentinel, Fort Lauderdale, Fla.McClatchy-Tribune Regional News

Dec. 15, 2008 - Like Fort Lauderdale, San Antonio wanted a hotel dedicated to serving its convention center. And like Fort Lauderdale, San Antonio officials hired developers at FaulknerUSA to bring the dream to reality.

San Antonio's Grand Hyatt project fell so far behind that the hotel was only partly complete in time for the college basketball finals at the convention center this spring. More than a dozen subcontractors have filed claims that Faulkner owes them millions of dollars. Last week, JPMorgan Chase Bank sued to collect $6.1 million in loans.

The Fort Lauderdale hotel plans are a year behind schedule. There's no final agreement drawn up with county government nor any financing arranged. Despite that, the county recently agreed to reimburse $1 million in expenses to Faulkner, including salaries of its top executives.

Faulkner's critics in Texas warn Broward County to be wary.

"I cannot believe Fort Lauderdale hired them," said Kathryn Carlisle, president of a steel fabrication company who says Faulkner owes her $600,000 for work on the San Antonio hotel. "With all the problems and how poorly the project was run and how behind they were, I'm stunned."

Broward commissioners have warred over the hotel plans since choosing Faulkner and its partner, Hilton Hotels, last fall. Two Faulkner-Hilton supporters -- Commissioners Ken Keechl and Suzanne Gunzburger -- say they want more information about what has transpired in San Antonio, but Mayor Stacy Ritter said Faulkner's troubles there are not substantial.

"I challenge you to find any large company that has not had problems," Ritter said

Faulkner executives listed the San Antonio project as one of their success stories when they bid on Broward's plans. They said that lengthy periods of bad weather are largely to blame for delays and that the number of claims and suits filed by subcontractors is not out of the ordinary.

"Faulkner's commitment to this [San Antonio] project was pivotal and instrumental in making this hotel a reality," Faulkner executives Mark Schultz and Mark Armstrong wrote in a letter to Broward County officials.

The city of San Antonio selected Faulkner to design and build the Grand Hyatt in December 2004 and wanted it completed by spring 2008. According to Faulkner, a fifth of the hotel rooms were not ready in time for the basketball finals in April. The San Antonio Express-News reports that some work will not be complete until April.

Initial estimates were that the Grand Hyatt would cost $217 million. Faulkner executives have acknowledged more than $77 million in cost overruns, but they said that is due largely to higher costs for construction material and rerouting utility lines discovered on the property.

An Express-News article last month said subcontractors have made $15.9 million in claims against Faulkner and its partners alleging unpaid work. Drywall workers picketed outside the hotel at the start of the basketball tournament and a Web site has been launched attacking Faulkner over the claims.

One subcontractor, United Forming Inc., won a $6.6 million judgment from an arbitration panel over allegations that Faulkner wrongly fired the firm. According to the panel's June 30 ruling Faulkner falsified an accelerated work schedule and used that as basis for terminating United Forming.

The panel termed Faulkner's dealings with United Forming as tainted by "dishonesty, malice and prejudice." Faulkner accused the arbitration panel of bias, but a federal magistrate in Texas has agreed with the decision.

Doug McMurry of the San Antonio chapter of the Associated General Contractors said Faulkner's history should raise red flags to Broward County. "The project here has been an epic disaster," he said.

Scott Wyman can be reached at swyman@sunsentinel.com or 954-356-4511.

-----

To see more of the Sun Sentinel or to subscribe to the newspaper, go to http://www.sun-sentinel.com/.

Copyright (c) 2008, Sun Sentinel, Fort Lauderdale, Fla.

Distributed by McClatchy-Tribune Information Services. For reprints, email tmsreprints@permissionsgroup.com, call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA.




To search Hotel Online data base of News and Trends Go to Hotel.OnlineSearch
Home | Welcome| Hospitality News | Classifieds| One-on-One |
Viewpoint Forum | Industry Resources | Press Releases
Please contact Hotel.Onlinewith your comments and suggestions.