Judge reduces lien against Arris Lofts to $5.6 million

Sep.September 04, 2008 01:28 PM

A New York State Supreme Court judge has reduced a lien filed by a contractor against the developer of Arris Lofts in Long Island City from $13.1 million to $5.6 million, after the developer filed a motion challenging the original claim.

Pavarini McGovern filed a mechanic’s lien in August 2007, claiming it had been fired from the Queens project after a dispute over its construction.

Andalex Group affiliate TAG Court Square, the owner of Arris Lofts, entered an agreement with Pavarini McGovern in December 2005 to convert the former Eagle Electric Building at 45-31 Court Square North into a residential property.

After Pavarini McGovern became the general contractor for the $90.7 million project, it became embroiled in a dispute with TAG over the pace and quality of construction, and by February 2007 was issued a termination notice, according to court documents.

TAG Court Square, in a court filing, alleged that Pavarini McGovern “materially breached its obligations” by performing defective work, failing to properly coordinate the work of its subcontractors and abandoning the project. 

Pavarini McGovern is a New York-based construction firm and an affiliate of Structure Tone Organization, which has $2.5 billion in annual revenue. In its counterclaim, TAG also named Structure Tone, which was hired in March 2007 to help Pavarini McGovern complete the project.

TAG Court Square alleges that the contractors walked off the job in August 2007 after a payment dispute, which forced the developer to hire additional contractors to finish the project. The developer claims it lost more than $30 million due to delays and poor quality of the work.

“They had issues with respect to payment,” Harry Sacks, attorney for TAG Court Square, said. “They felt they were entitled to additional funds. Essentially, they tried to strongarm the situation.”

Lawyers for Pavarini McGovern argue that the company never walked off the job, but was locked out of the site.

“Our view is we did not abandon the project at all,” said Steve Charney, co-managing partner at Peckar & Abramson and attorney for Pavarini McGovern. “In August, we were locked out of the project and literally prevented from continuing.”

The case is still in the discovery phase, and pretrial depositions are scheduled for November.

Pavarini McGovern officials were not immediately available for comment.

Judge Oren Kitzes ruled in late July that the $13.1 million lien would be reduced by $7.5 million, noting that TAG has since paid that amount to various subcontractors of Pavarini McGovern.

Tom Le, vice president and associate broker at Corcoran Group, said that Arris Lofts has sold about 90 percent of its 237 units, with about 25 remaining for sale.

Streeteasy.com lists 21 units at Arris Lofts available for sale at $756 per square foot, or between $795,000 and $2.2 million. Two apartments are listed for rent, including a one-bedroom for $3,000 and a three-bedroom for $5,500 a month. The development has recorded the priciest condo ever sold in Queens, a four-bedroom, 3,225-square-foot apartment that sold for $2.9 million in April, as The Real Deal reports in its new issue.

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