Litigation settled over building Ae‘o tower at Ward Village

A $49 million legal dispute over building the nearly year-old Ae‘o condominium tower at Ward Village in Kakaako has been settled.

Howard Hughes Corp., developer of the tower, announced the settlement this week in a joint statement with the project’s general contractor, Layton Construction Co.

Layton filed a legal complaint against affiliates of Hughes Corp. on Dec. 18, claiming that it was owed $49 million for unpaid bills on a $359 million job to build the 38-story tower that contains a Whole Foods store and opened about two weeks after the complaint was filed in state Circuit Court.

Hughes Corp. contended that it had been “grossly overcharged” for work on the tower.

Much of the work that was in dispute involved change orders and had been done by subcontractors. About 20 subcontractors filed their own complaints, known as mechanic’s lien applications, against Layton, which is based in Utah, and Texas-based Hughes Corp. A couple of complaints also were tied to demolition work on a nearby park site.

All these complaints were settled, according to the two primary parties. Terms of the settlement weren’t disclosed.

In their joint statement, Hughes Corp. and Layton said, “Both parties are pleased with the outcome and proud of the outstanding craftsmanship that went into building the world-class Ae‘o tower.”

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.

Hughes Corp. has completed four towers at Ward Village. Two more are under construction. Of the completed towers, one other is mired in a more complex construction litigation case. That case involves alleged unpaid bills but also alleged construction defects that include loud popping noises coming from glass window walls at Ward Village’s priciest tower, Waiea, where prices for 174 units averaged $3.6 million.

The Waiea case involves general contractor Nordic PCL Construction and numerous subcontractors.

Hughes Corp. 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.