Navillus seeks to finish the job at SL Green’s One Vanderbilt
A completion agreement would allow the group to continue its $136M contract with Tishman
Navillus is seeking to continue work at SL Green Realty’s One Vanderbilt as the subcontractor winds its way through bankruptcy court.
In a motion filed with the bankruptcy court, Navillus asked for approval of a completion agreement that would pave the way for the concrete subcontractor to finish its work at the 1.5 million-square-foot office tower. The project is Navillus’ largest: AECOM Tishman hired the subcontractor in October 2016, agreeing to a base contract of $135.9 million.
But the agreement was imperiled by Navillus’ recent financial troubles. The company filed for Chapter 11 bankruptcy protection in November, two months after it was hit with a $76 million judgment in a federal lawsuit. Five union benefit and pension funds accused the company of evading agreements to use union labor on its projects through a company owned by its CEO Donal O’Sullivan’s brother, Kevin. Navillus is appealing the judgment.
In October, following the federal judgment, Tishman moved to terminate its contracts with Navillus at One Vanderbilt and One Manhattan West, claiming that Navillus’ insolvency meant that it defaulted on the contracts. The company, however, has reached an agreement with SL Green and Liberty Mutual Insurance to allow Navillus to finish its work on the office tower. Liberty Mutual — which provided performance and payment bonds when Navillus first got the contract — has agreed to continue its role as surety on the bonds if Navillus remains on the project.
SL Green and Tishman have signed off on the deal, which requires court approval, according to court documents.
“The agreement reaffirms Navillus as the preferred contractor of choice and with the continued support of our partners Tishman and SL Green, we will conduct our business as usual,” a representative for Navillus said in a statement. The company declined to comment on the status of its contract on Brookfield Property Partners’ Manhattan West project.
In its motion, Navillus noted that it would’ve likely had to consider suing Tishman if the company decided to hire a different subcontractor to work on One Vanderbilt. A spokesperson for Tishman noted on Monday that the contractor supports the completion agreement.
“There have been no delays and we are confident in Navillus’ ability to finish the work,” he said in a statement.
On Friday, a group of creditors in the bankruptcy filed a partial opposition to Navillus’ request. While the group believes that Navillus exercised “sound business judgment” in wanting to complete its work at One Vanderbilt, it objects to certain terms in the completion agreement. As part of the deal, Liberty Mutual can end the agreement if Navillus doesn’t meet certain milestones.The creditors argue that handing such control of the bankruptcy timeline over to Liberty Mutual in relation to one contract is “wholly inappropriate.”
An attorney for the creditors didn’t immediately return a call seeking comment.
A hearing on Navillus’ motion is slated for Wednesday.