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Shaner Hotel Group in Dispute with General Contractor;
Florida Fairfied Inn Opens Nearly a Year Late

By Christopher Calnan, The Florida Times-Union, Jacksonville
Knight Ridder/Tribune Business News

May 28, 2004 - JACKSONVILLE BEACH, Fla. -- A group of subcontractors caught in a dispute between the owners of a new Jacksonville Beach hotel and the general contractor picketed outside the hotel Thursday saying they haven't been paid for work.

The general contractor, the Douglas Co., said he can't pay the subcontractors until the hotel's owners pay him.

And the owner of the Fairfield Inn & Suites by Marriott, Jelms Hotel Co. LLP, said it was withholding payment because Douglas didn't do the job according to its contract.

Construction of the 76-room hotel was completed last week, nearly a year after it was initially scheduled to be done.

The two companies plan to meet in two weeks to attempt to resolve the dispute, said Peter Hulburt, vice president and attorney for Pennsylvania-based Shaner Hotel Group LLP, an affiliate of Jelms.

"There are issues about performance and a substantial amount of liens on the property," he said. "All these matters need to be resolved. We'd love to wrap this whole matter up and have the subs be paid. We sympathize with some of these subs."

Meanwhile, the subcontractors plan to picket outside the North First Street hotel every Friday afternoon "to affect the weekend traffic" until they're paid, said electrician Mark Stratmann, owner of Electric Solutions of Northeast Florida Inc.

Stratmann said he's owed about $140,000. About 45 subcontractors who worked on the job are owed an average $90,000 apiece, he said.

"We just need our money," Stratmann said. "The owner needs to pay us; the hotel is open. We're going to be out here every day, some how, some way."

About 15 subcontractors quietly walked in front of the hotel for about two hours Thursday morning while carrying signs asking for payment.

D.J. McGlothern, executive vice president of the Douglas Co., said Jelms is withholding more money than it is entitled to withhold while the dispute is being resolved. He also said the subcontractors realize their contracts include a clause stating they will be paid when the general contractor is paid.

"The subs are very much aware of that. That's why they're picketing the owner," McGlothern said. "The owner has been less than fair in how they address the disputed conditions."

The hotel was initially scheduled to open in June 2003. It was then due to open in October 2003.

The Douglas Co., which specializes in building elder-care facilities, has been in the general contracting business for 28 years. The company has operated an Orlando office for 20 years, but the Jacksonville Beach project was its first with Jelms, McGlothern said.

The State College, Pa.-based Shaner Hotel Group, operates about 24 hotels. It owns one other in the Jacksonville area, the 143-room Holiday Inn Sunspree Resort, across First Street North from the new hotel. Shaner bought the Sunspree in 1991, according to Shaner's Web site.

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