Miami Beach Convention Center contractor sues city, alleging $90M in unpaid work

UPDATED, Jan. 29, 6:55 p.m.: During Art Basel Miami Beach, attendees enjoyed new exhibition space at the Miami Beach Convention Center, thanks to the completion of a half billion-dollar renovation project.

But Clark Construction, the contractor on the project, alleges the city of Miami Beach still owes it about $90 million in unpaid work, even as the convention center was hosting events and generating revenue from conferences.

In a lawsuit filed Wednesday in Miami-Dade Circuit Court, the Bethesda, Maryland-based construction company alleges the city has not paid the firm and more than 30 subcontractors for some of the work performed on the project. That includes $70 million in unpaid work and $20 million in contract balance owed.

Miami Beach City Manager Jimmy Morales responded to the suit, saying in a statement that the city will “fully litigate the matter.”

“I find it shocking, given that Clark Construction has delayed this project for nearly 1.5 years, that they have the gall to file a lawsuit against us,” Morales said in the statement. “Frankly, the city is the one entitled to damages, not Clark.”

Clark alleges that since it reached an agreement in 2015 to work on renovations costing over $515 million, the city insisted on numerous redesigns and new plans, inflating the labor and supply costs and extending the completion date of the project. According to the suit, Miami Beach worked with the consulting company Hill International to push for the new plans, while also rejecting time extensions by Clark.

Clark’s agreement involved the 1.5 million-square-foot renovation of part of the Miami Beach Convention Center, including 500,000 square feet of exhibit halls, meeting rooms, and pre-function support spaces; a new 60,000-square-foot grand ballroom; and landscaping and street improvements.

Despite the convention center operating, it has not yet received its Temporary Certificate of Occupancy, also known TCO, primarily due to an issue with the fire alarms, said Etan Mark at the Miami-based law firm Mark Migdal & Hayden, who represents Clark Construction. Yet, over 92 shows were held throughout construction, including 52 since the substantial completion date of August 23, 2018, according to the complaint.

Mark said the city’s actions have had a large financial impact on many of Clark’s subcontractors, which are based in South Florida. “There are now dozens of Miami-based subcontractors who have not been paid,” Mark said.

Clark also alleges Miami Beach owes the company $1.2 million that the city received from Miami-Dade County for delays and impacts on the convention center caused by Hurricane Irma in 2017.

The suit follows one filed in June by Banker Steel against four insurance companies that provided a $515 million performance bond for the project. The suit alleged that Clark Construction failed to pay by Lynchburg, Virginia-based Banker Steel $3.2 million for unpaid labor, services and materials that were furnished by June 2018.