Webcor sues Greenland for millions in alleged unpaid fees at Metropolis megaproject

The construction heavyweight has a massive contract with the US arm of the Chinese developer

TRD LOS ANGELES /
Jul.July 12, 2019 04:00 PM
Greenland USA’s Hu Gang and Webcor CEO Jes Pedersen
Greenland USA’s Hu Gang and Webcor CEO Jes Pedersen (Credit: Hunter Kerhart)

UPDATED, July 2, 11:10 p.m.: Webcor Construction has sued Greenland USA over millions of dollars in alleged unpaid work at Greenland’s massive Metropolis condominium and hotel project in Downtown Los Angeles.

San Francisco-based Webcor says Greenland — the American arm of China-based Greenland Group — is in breach of contract for $9.8 million, according to the suit filed in L.A. County Superior Court.

The construction heavyweight — Webcor was No. 2 in The Real Deal’s ranking of top construction firms in L.A. last year — filed its claim in the form of a mechanic’s lien. It is placed against a property as compensation for alleged unpaid work. Webcor has also sued Chinese developer Oceanwide Holdings for $52 million worth of unpaid work — also through a mechanic’s lien — at its troubled Oceanwide Plaza megaproject Downtown.

A source familiar with Greenland USA’s position said the company had been served with the complaint, which was  filed June 10. The firm had no comment on the lawsuit. Webcor did not comment.

The dispute originates with a $435.9 million contract Webcor and Greenland USA negotiated last fall for work on Metropolis’ Tower II , including around $6 million of unresolved work payments on Tower I.

Greenland’s $1 billion megadevelopment in South Park will span 3.3 million square feet when completed. The firm bought the dirt five years ago, and has built three of the four properties.

The contract was meant to resolve any outstanding payment disputes, including “extra and changed work, associated costs and delays,” according to the lawsuit.

Such contracts are common on large development projects. They account for unplanned costs incurred by builders as well as work that was cancelled or changed during the course of construction.

Webcor is the prime contractor on Towers I and II and the 350-room Hotel Indigo, which was completed in early 2017. Webcor’s total contract agreement with Greenland was around $810 million, a source close to the litigation told The Real Deal.

The Metropolis project involves the two condo towers — which total 820 units — the hotel and a third residential tower that is still under construction. Greenland USA began shopping the Hotel Indigo early last year. An individual familiar with Greenland’s position told TRD that Greenland is longer actively soliciting a sale of the hotel, but is entertaining offers.


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