Developer of the failed New York Wheel sues its contractor … again

Multiple lawsuits have been filed related to the project’s collapse in varying jurisdictions

New York /
Dec.December 02, 2020 06:00 PM
A rendering of the Staten Island Wheel (Rendering via Perkins Eastman)

A rendering of the Staten Island Wheel (Rendering via Perkins Eastman)

When it comes to the Staten Island Ferris wheel, the only things going around and around these days are lawsuit filings.

The developer of the failed project, known as New York Wheel Owner, filed a suit in New York State Supreme Court this week that alleges the project’s contractors are responsible for the wheel’s demise two years ago.

It’s the latest in a string of lawsuits related to the project, which have piled up thanks to disputes over which court has the right to hear the various complaints.

The developer initially filed a lawsuit against the contractors in 2017 in federal court. That lawsuit was dismissed in 2018 and reopened a year later with the project’s fundraiser, an EB-5 regional center known as CanAm Enterprises, added as a plaintiff.

But in October, the developer and the contractor wrote a letter to the court claiming that there was a “jurisdictional defect,” and that the case should never have been filed in district court to begin with. The “defect” stemmed from two minority investors from Florida and California, which was the same place where the project’s contractors were located.

It gets more confusing: Last month, CanAm Enterprises filed its own lawsuit in federal court against the contractor, without New York Wheel Owner as a co-plaintiff. On the same day, one of the project’s contractors, Mammoet, filed a suit in New York State Supreme Court against CanAm and the developer, seeking to move the entire dispute to a new venue.

While the jurisdictional issue plays out, the lawsuits also offer vastly differing accounts at what went wrong with the New York Wheel project. In its most recent suit, the developer alleges that the project’s contractors, Mammoet and Starneth (the latter of which is not named as a party in either lawsuit), underestimated how much it would cost to build the wheel. The contractors realized they would lose money so instead, they jacked up the fixed costs, according to the complaint.

Mammoet, meanwhile, alleges in its most recent lawsuit that the developer breached its contract and failed to pay for the work performed since November 2016. Ultimately, this caused the contractors to exit the project.

Attorneys for Mammoet and New York Wheel Owner did not immediately return a request for comment.





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