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City Hall's Hand-Picked Hotel Builder Sued for $667,206 in Iowa
Roddy Stinson
San Antonio Express-News
March 15, 2005
[Note: This material is copyright by the San Antonio Express-News, and is reproduced here as a matter of "fair use" for non-commercial, educational purposes only. Any other use may require the prior approval of the San Antonio Express-News.]
The suit is one of two legal actions taken against FaulknerUSA in connection with the company's work on a hotel/conference center in Coralville, Iowa. (For details of the other suit — filed by the city of Coralville — see last Thursday's column.)
According to an Iowa City Press-Citizen report, Cincinnati-based Cole+Russell Architects contends that FaulknerUSA hasn't paid the firm for "design development and construction documents as well as additional agreed-upon services" and is seeking payment, plus interest, totaling $667,206.
A long-distance attempt to obtain more details from the Ohio firm was met with this terse response from CEO David Arends:
"We're not going to comment. The suit and the basis for the claim are matters of record."
A statement issued by FaulknerUSA was a bit more informative:
"FaulknerUSA strongly disputes the architect's suit.
"FaulknerUSA has moved the lawsuit from a state to federal level and is asking the federal court to consolidate the two claims into one.
"FaulknerUSA has filed a third-party claim — not to be confused with a countersuit — asking that the city of Coralville and the Hotel Authority cover the claims brought by Cole+Russell.
"It is FaulknerUSA's position that should the claim be deemed legitimate and someone is liable, it should be the city."
That "position" jibes with the testy statement issued by FaulknerUSA in response to the city of Coralville suit. ("FaulknerUSA has worked in good faith with the city, enduring a tremendous amount of indecision and questionable choices by this former client.")
Na-na, na-na, na-naaaa.
The legal wrangling 1,000 miles north of San Antonio would be of little local interest except for a growing concern among some members of the Alamo City business community about City Hall's headlong rush to sign a Convention Center hotel development contract with FaulknerUSA before Mayor Ed Garza leaves office on May 31.
Their main fear:
That the contract won't include sufficient protections for San Antonio taxpayers in the event that the hotel project goes south before, during or after construction.
Their preferred safeguard:
Appointment of a contract-advisory group made up of representatives of the local hospitality industry, real estate industry and financial and legal communities.
"A group of accomplished professionals could help guide the city through the final negotiations," said Henry Feldman, a hospitality industry expert who was a member of a previous Convention Center Hotel Advisory Board that Mayor Garza and his City Hall minions summarily dismissed last fall.
"Too many things can go wrong, and this deal could go awry. We must make sure that (FaulknerUSA officials) deliver on everything they promised."
Another business community leader I spoke to echoed Feldman's advisory board wish and expressed his growing concern that the contract ...
Will not contain language that is sufficiently ironclad to hold FaulknerUSA to its initial financial guarantees.
Will contain language that allows Faulkner to later renegotiate the contract, reduce its commitments and increase taxpayers' potential liability.
Will not include provisions that effectively discourage ugly, expensive legal messes ...
Such as the lawsuits now wending their way through district courts in Johnson County, Iowa.