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Subcontractors in O'Fallon, Illinois File Lawsuit for $900,000 for Unpaid Work
on Regency Conference Center and Hilton Garden Inn Hotel
 
City Blames South Dakota Based Pro Built Managment Who Refuses to Negotiate


By Scott Wuerz, Belleville News-Democrat, Ill.McClatchy-Tribune Regional News

Jan. 18, 2010--O'FALLON -- More than a year after it opened, a group of contractors is waiting to be paid for work they did on the Regency Conference Center and the neighboring Hilton Garden Inn hotel.

Lugge Concrete Construction, Rooters American Maintenance, Berutti & Associates, Kinzler Construction and Bergmann-Roscow Plumbing claim in a lawsuit filed against the city, developer D&D Lodging and general contractor Pro Built Management that more than $900,000 is owed to them for work they did on the two buildings. About $550,000 of that amount is for work done on the conference center and about $350,000 was for work done on the hotel.

O'Fallon City Administrator Walter Denton said the city, which financed the project with $6 million in bonds, paid developer D&D Lodging for the work and D&D paid South Dakota-based general contractor Pro Built Systems. But, he said, for unknown reasons, Pro Built did not distribute money to subcontractors.

"The city paid everything it was supposed to pay to the developer and the developer paid the general contractor," Denton said. "But there is a dispute with the general contractor and the subcontractor as far as what they were owed."

Calls to Pro Built Management's Sioux Falls, S.D., headquarters were not returned.

Denton said city leaders were wary when they learned that the Hilton chain wanted to use Pro Built, a company that had built hotels for them before, to be the general contractor over the hotel and the conference center.

"It can be problematic dealing with an out-of-state general contractor," Denton said. "We had contractors here who were perfectly capable of doing the job. But that's the contractor the Hilton people wanted."

Edwardsville-based attorney Jason Johnson, who represents the subcontractors in the suit, agreed and said he believes that the city paid D&D and that the developer in turn paid Pro Built. He said the general contractor not only has refused to pay, but refuses to even negotiate.

"It seems most of the blame falls on the general contractor," Johnson said. "Maybe they got behind on other projects. Instead of paying their subcontractors, they spent the money on something else."

Pro Built exercised a clause in their contract that requires mediation to solve disputes. In December, a negotiating session was held at the conference center, according to Johnson. But Pro Built refused to pay anything. A court date has not yet been set.

John Garcia, part owner of Rooters American, said at one point Pro Built offered to settle their debts to subcontractors for 65 cents on the dollar.

"We're not a big company," Garcia said. "Being out this money is a major problem for us. We have had to lay people off. Times are tough already, and things like this make it hard to survive."

D&D part owner Darwin Miles said his company has been working with the subcontractors to resolve the problem, even though Pro Built owes the money.

"I signed contracts with the general contractor for specific amounts not to exceed for both the conference center and the hotel," Miles said. "Pro Built did not perform or manage the contracts as well as they should have. Now they have left us holding the bag."

Miles said that while he and the subcontractors have tried to recover money from Pro Built, company leaders have threatened to file bankruptcy.

Johnson said that while he feels Pro Built is to blame, the city owns the conference center and D&D owns the hotel, so they are ultimately responsible for the bills. He also blamed the city for not having a performance bond on the project that could have been used to pay the subcontractors.

"Frankly, it is difficult to deal with Pro Built because they are so far away," Johnson said. "My clients would like it if the city and the developer would pay them, then they can sort it out with Pro Built."

The Regency Conference Center opened in the fall of 2008. The 32,000-square-foot conference center can hold events with more than 800 people. It includes 13,500 square feet of meeting space with high speed wireless Internet service and built-in Web-conference stations.

O'Fallon taxpayers paid $6 million for construction of the conference center, which the city will lease back to Miles and partner Darrell Shelton, owners of D&D Lodging.

Contact reporter Scott Wuerz at swuerz@bnd.com or 239-2626.

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To see more of the Belleville News-Democrat, Ill., or to subscribe, visit http://www.belleville.com.

Copyright (c) 2010, Belleville News-Democrat, Ill.

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