Last week Taylor, the Builders, representatives announced that they had stopped work on the Harold’s Square project, a mixed-use development project on the Ithaca Commons, due to disagreements with the project’s developers, L-Enterprises from Horseheads, and McGuire Development from Buffalo.
Karl Schuler, President of Taylor, the Builders, likened the situation to a divorce. In the release from Taylor representatives, the major reason for the contracting company stopping work on the project had to do with “significant design changes since the project started which had an impact on all of the trades (plumbing, heating, electrical, etc.).” Because of the number and scope of the changes, Taylor and its subcontractors wanted to renegotiate their work contracts, but Schuler said that the development team was not willing to renegotiate. Taylor told the developers on Jan. 3 that it could not continue work under the current conditions.
“Contractually we notified them that because of the disagreements, we’re not required to proceed,” Schuler said. “They disagreed.”
According to a release from McGuire Development, the development company terminated Taylor on Jan. 4, with their last day of work scheduled for Jan. 11, and said there will be no stoppage in work. The development team has already chosen LeChase Construction LLC to replace Taylor, the Builders, on the project and work could start up again as soon as this week. McGuire expects the transition to be “seamless,” because, according to the release, Taylor was not the contractor but the construction manager. The company expects to transition with the existing subcontractors.
Taylor has been involved in the project for around 10 years and has enjoyed a good working relationship with David Lubin and L-Enterprises. It wasn’t until McGuire Development became involved that the disagreements started, Shuler said, and if offered the chance to renegotiate now they probably wouldn’t.
“When we started the process working with L-Enterprises, we could have [renegotiated],” Schuler said. “But they brought on a new partner and this new partner has a different way of doing business. Let’s just say they have different values than us, and they just made it difficult.”
The many changes to the design, Schuler said, covered all aspects of the project: structural scale, foundation, concrete, site work, plumbing, heating, electric, roofing, windows, and doors, among others. Schuler said the developers told them that nothing had changed.
“We had all the tradesman - the plumber, the electrician, and everything else – these are people who are working under us and they said ‘We can’t proceed because of the amount of changes,’” Shuler said. “We couldn’t build what was part of our original drawings anymore because the drawings didn’t reflect what was on the original drawings. We couldn’t build what was on the new drawings because they didn’t believe that there was any warrant for compensation for those changes.”
Schuler said he has no ill-will toward L-Enterprises and wants to see the project succeed.
“Building a 12-story structure, between other properties on a pedestrian mall with no staging area, is very complicated. It involves complex relationships between merchants, neighbors, utility companies, the City and others, which then effect construction, relationships, and budgets. At this time, we feel that moving forward with a new contractor will help us to bring the project to fruition with phased occupancy in late 2019 and early 2020,” Lubin, was quoted in the McGuire release.
Megan Tafelski, Marketing Director for McGuire Development, said that the company had tried to establish a general working budget with Taylor for a while, but struggled to get one, and had to work within set budget parameters created for the project.
“Even if there are changes made, the contractor needs to be able to work with us to figure out how those changes can be made still within our budget,” Tafelski said. “All of the money, all of the financing that the partners were eligible for had already been on the table.”
Taylor and McGuire started having issues being on the same page, Tafelski said, while negotiating these changes. In response to Taylor’s claim that the changes to the project necessitated a new contract, Tafelski said that the approach and process between Taylor and McGuire was not as aligned as what they were looking for.
When asked how many changes had been made to the project from the original plan Tafelski said it wasn’t that many changes and was irrelevant. The timeline for the project was already affected by the disagreements between Taylor and McGuire, Tafelski said, but they still expect completion of the project in late 2019 or early 2020. But, if anything, Tafelski said, the change in contractor will save the development team money.
“The way that we were going we were experiencing unalignment and delays that continues to cost more and more money, so now that we’re able to get back on track and we have more of an alliance with the contractor it’s very clear what our budget spending will be and we’re very comfortable with that,” Tafelski said.
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