Lawsuits filed against Hotel Paseo & project general contractor
By March, the concrete had set and the dust had settled. Hotel El Paseo officially opened for business in style, with champagne, live music, pomp, and circumstance making its March 12 grand opening a notable one.
The 150-room hotel has gone on to operate without a hitch since then, seemingly.
Recently, 6 lawsuits filed by 8 companies have come to light that may paint the site differently; the lawsuits allege that El Paseo Hotel LLC & Watkins Landmark Construction, the company that built the hotel, failed to pay contractors and vendors, and breached contracts.
In an exclusive interview with one of the hotel owners, Robert Leach, Leach explained, according to contract, it’s the general contractor’s responsibility to pay its subcontractors.
“We can’t pay them, because they never worked for us, they worked for the general contractor,” said Leach. He confirms about $3 million was never paid to the general contractor, Watkins Landmark Construction. Leach says it’s money in damaged work that has yet to be corrected.
“We have plenty of money to pay people, we just have some legitimate claims that need to be addressed before the money gets released,” said Leach, “These are defects that are plain and simple defects. They’re either code violations, or just done wrong. Whoever did it, wasn’t properly supervised. Those defects are pretty easy to spot and undeniable.”
On the other side, CEO of Watkins Landmark Construction, Jody Watkins says Leach is to blame.
“Watkins Landmark Construction is a construction company, not a bank. I don’t have the financial wherewithal if the owner decides to withhold $4 million from me to pay my subcontractors that $4 million and wait for Mr. Leach to pay me when he gets around to it,” Watkins said.
The hotel and general contractor are now in a mediation phase trying to agree on how much money is owed and how much of the project is in fact considered defective before having to go to arbitration.
“We’ve tried to do everything we can, jumped through every hoop. We’re still out there this week repairing things, trying to get to the resolution on this corrective action plan, trying to get rid of this issue and get this money released. We’re going on a year since we’ve had people on site without receiving payment,” said Watkins.
“I’m not exactly thrilled about holding money back from any contractor you know, but at the same time, I represent investors that paid for a nice product and they deserve to get a decent product. There was some short cuts and problems and it’s just not right,” said Leach.
Restaurant and bar AC3 located inside the hotel say they are not a part of this lawsuit, that the contractors that worked on the restaurant were paid separately and they aren’t involved in this dispute.
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