The developer of Ward Village is embroiled in another legal dispute over construction of a condominium tower in Kakaako.
Contractors over the last three months have been filing court claims against affiliates of Howard Hughes Corp. for allegedly not completely paying for work on the luxury Ae‘o high-rise, which opened in December.
The tower’s general contractor, Layton Construction Co., claims it is owed $49 million for unpaid bills on a $359 million job to build the 38-story tower.
Layton’s claims represent the second time a general contractor has accused Hughes Corp. of not paying for work on a tower.
The other case involved Waiea, which opened in 2016 and was the first tower Hughes Corp. developed in Kakaako. Waiea’s contractor, Nordic PCL Construction, claimed that Hughes Corp. hadn’t paid for $40 million of work. Several subcontractors also filed their own complaints, known as mechanic’s lien appli- cations, in state court contending that Hughes Corp. owed them money for unpaid work. Hughes Corp. alleged that Waiea had major construction defects and that Nordic delivered substandard work, missed deadlines and went over budget. Nordic has refuted those claims.
A second Ward Village tower, Anaha, opened in 2017 and had no major litigation over construction payments.
In the Ae‘o case, Layton filed its lien application Dec. 18, about two weeks after Hughes Corp. held a blessing ceremony to open the tower and welcome its first occupants.
Ae‘o was the first Ward Village tower to sell out, with 466 units selling for $1 million on average, or $466 million in total.
Layton’s filing said the company was paid only $310 million for $359 million of work that it provided itself or through subcontractors. The original contract was for $282 million but was inflated by change orders, including many approved by Hughes Corp. and some that are still pending or are disputed, the filing said.
Since Layton’s claim was made, a few subcontractors have filed their own lien applications against the general contractor and the developer.
Commercial Shelving Inc. filed a claim last month that said its original $174,195 contract mainly to provide equipment was changed to $631,849 for equipment and to provide storage lockers in the building. Commercial Shelving said it hasn’t been paid $454,033.
Takano Nakamura Landscaping Inc. claims it is owed $159,160 for extra work on a $1.2 million job that included fixing damaged landscaping and filling sandbags for Hurricane Lane in August.
Steel Encounters Inc. said in a claim it filed that its original $2.4 million contract for work on the Whole Foods Market space in the tower was changed to a $27 million job that included the tower’s window wall system and that it finished the work but is still owed $4.7 million.
Layton said in its claim that Hughes Corp. officials insisted during an all-day meeting Dec. 17 that it shouldn’t have to pay Layton what the contractor claimed as owed.
Hughes Corp. declined to comment on the Ae‘o construction payment claims.
The Texas-based company has a master plan to develop up to 4,500 homes and 1 million square feet of retail space in 16 towers at Ward Village on 60 acres of largely retail and industrial property it acquired in 2010 from Chicago-based General Growth Properties.
