Lawsuits force Atlas Capital’s DTLA project to chart new path

Complaints and counter-complaints center on two buildings along “Restaurant Row”

Los Angeles /
Jul.July 14, 2020 03:15 PM
712 Olive St. (Credit: Google Maps)
712 Olive St. (Credit: Google Maps)

Atlas Capital Group’s transformation of two buildings in a changing part of downtown Los Angeles has lead to a series of lawsuits.

The New York City-based developer in 2017 began gutting a 99-year-old, six-story building at 712 South Olive Street and adjacent two-story structure at 410 W. 7th St. with the plan to lease out retail and office space.

Both buildings have received a temporary certificate of occupancy, according to L.A. County records. But a company spokesperson Wednesday said that Atlas Capital did much of the construction on its own after firing general contractor City Constructors.

Last month downtown L.A.-headquartered City Constructors filed a lawsuit against Atlas.

The lawsuit filed in Los Angeles County Superior Court alleged that Atlas failed to map out the scope of the building revamps, and that the developer owed City Constructors at least $1 million.

Atlas fired back 10 days later with a lawsuit of its own, stating that City Constructors bungled its work and owes Atlas $5.5 million.

Adding to the project’s troubles is a number of subcontractors who both lawsuits suggest went unpaid.

One subcontractor, Arleta-based DMR Construction, filed its own lawsuit last week. The complaint alleges that Atlas owes DMR Construction $159,000 for drywall and installation work.

The litigation would appear a setback for Atlas’s L.A. growing portfolio.

The 14-year-old company bought the L.A. Times printing plant for $240 million in December, and it has proposed a 725-unit residential building by Chinatown.

The buildings at 7th and Olive Street are part of downtown’s Jewelry District, an area filled with decades-old jewelry shops, shuttered storefronts, but also trendy new dining spots. In fact, civic boosters have taken to rebranding the area “Row DTLA” or “Restaurant Row.”

In the initial lawsuit filed regarding the redevelopment, City Constructors said that it ran into problems with the six-story, 160,000-square-foot Olive Street building because Atlas did not properly communicate plans with the L.A. Department of Buildings.

This triggered a “cascade of delays” furthered by Atlas providing incomplete design specifications, the lawsuit alleges. City Constructor said it consequently had to do preliminary waterproofing, plumbing, and sidewalk replacement just to begin the construction work Atlas specified.

Atlas’s countersuit contends project delays were because City Constructors had neither a subcontractor payment plan nor the sufficient manpower to deliver on its contract.

Messages left with City Constructors, and DMR Construction were not returned.

Clarification: An earlier version of the story did not include that the buildings received a temporary certificate of occupancy.


Related Articles

arrow_forward_ios
Construction in Downtown Los Angeles (Getty)
Downtown LA busiest in nation for new apartments
Downtown LA busiest in nation for new apartments
King Street, AIMCo team up with East End to amass production studios
King Street, AIMCo team up to amass production studios
King Street, AIMCo team up to amass production studios
808 S. Broadway and Steve Needleman of Anjac Fashion Buildings (Google Maps, Getty)
Downtown LA’s biggest rentals set for Fashion District
Downtown LA’s biggest rentals set for Fashion District
(Unsplash / Marty O’Neill)
LA County office availability hits 10-year high
LA County office availability hits 10-year high
DTLA 2040 rezoning plan advances to City Council
DTLA 2040 rezoning plan advances to City Council
DTLA 2040 rezoning plan advances to City Council
1101 Flower Street in L.A. with  Tony Lombardo of Lendlease and Zhang Xifang of Oceanwide. Xifang reportedly resigned in July 2021. (Google Maps, Lendlease, Oceanwide)
Contractor bails on Oceanwide’s LA megaproject after scoring $42M judgment
Contractor bails on Oceanwide’s LA megaproject after scoring $42M judgment
The Boyd Street fire in May, 2020 (Getty)
LA fire captain sues building, vape shop owners over May 2020 explosion in downtown
LA fire captain sues building, vape shop owners over May 2020 explosion in downtown
Hilton President and CEO Christopher J. Nassetta, Related Companies CEO Jeff T. Blau and a rendering of the project (Related, Getty)
Hilton’s Conrad brand to operate hotel at Related’s DTLA megaproject
Hilton’s Conrad brand to operate hotel at Related’s DTLA megaproject
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...