LR Main Street Lofts sees 3 file liens

$1.4M not paid, parties contend

A contractor, material supplier and the design firm that worked on the Main Street Lofts project in downtown Little Rock have filed multiple liens seeking more than $1.4 million that has gone unpaid over the past 2 1/2 years.

AMR Construction LLC, Fleming Structural PLC of Little Rock and Little Rock Winwater Co. filed the property liens with the Pulaski County clerk's office. Investors in the project, led by Reed Realty Advisors and developer Scott Reed of Portland, Ore., are in the process of selling one of the properties.

AMR is seeking about $1.2 million for materials and labor used in the project to renovate the Arkansas Building at 524 Main St.; the Arkansas Building Annex, also known as the Kahn Building, at 522 Main St., and the M.M. Cohn Building at 510 Main St.

Last month, project developers placed the Cohn building up for sale with an asking price of $3.8 million.

Scott Reed of Reed Realty, a key investor in the Main Street Lofts project, said Monday that investors are still planning to finish the Arkansas Building and the Annex building.

"Our contention is that we've followed the letter of the contract." Reed said in a telephone interview. "For all our construction contracts in Little Rock we have payment in the form of performance bonds."

But getting the project completed faces some difficulties, he said. "That's where we have a pretty significant disagreement with our contractor."

In its filing of a "materialmens lien" on May 1, AMR Construction said it was owed for labor and materials as part of work done between May 20, 2013, and April 30, 2015. Its lien said the original contract and adjustments totalled $4.8 million, of which it was paid $3.5 million.

Manley Roberts, an AMR partner, said Monday that work stopped in April because of unpaid invoices.

"Bonding is not an insurance policy to finish a job when the owner runs out of funds," Roberts said, adding that he will rely on the lien to at least get paid for the work that his workers and subcontractors have done.

Roberts said that work on the Annex building was "95 percent" complete, while the Arkansas Building was 65 to 70 percent done. If the outstanding bills are paid and AMR is guaranteed payment for future work, the two buildings could be ready for occupancy in 90 to 120 days, he said. He said he has the cabinets, appliances and other fixtures in his warehouse ready to be installed once the payment issue is resolved.

"We were making good progress, rolling right along and it just came to a screeching halt just simply because of payment," he said. "I thought we had a deal lately to sort of get back to work but it just hasn't come together."

Fleming Structural filed for an "engineers and architect's lien" in June 2014, saying it is owed $182,475 for architectural, mechanical, electrical and plumbing engineering work it did for the project.

In January, Fleming also filed a breach of contract lawsuit in Pulaski County Circuit Court against Main Street Lofts and Travelers Casualty and Surety Co. of America, saying it had yet to be paid three invoices totalling $182,475 stemming from work done before Jan. 30, 2014. Fleming said in its suit that Main Street Lofts secured a bond in July 2014 to discharge the earlier lien placed by Fleming for that amount but has never paid anything toward those invoices.

Fleming's lawsuit said that Main Street Lofts used the architectural and engineering plans to obtain federal historical tax credits as well as city building permits.

The third lien holder, Little Rock Winwater Co. , filed for a lien on June 9, saying it was never paid for $18,097.42 for materials delivered to Co-Bar Contracting Inc. of Scott for water system work done at 514 and 524 Main St. Co-Bar was a subcontractor that worked for AMR on the project.

Reed on Monday said the loss of a tax credit issued for redeveloping historic properties factored into the decision to sell the Cohn building. While the Arkansas and Annex buildings are still financially feasible since they are farther along than the Cohn building, losing the credit could drive up lease costs to more than what those who want to live in a "creative corridor" can afford, he said.

"The change in the tax credit law for the state historic tax credit is very significant and material to us. That's our core business," Reed said. "If the tax credit law changes and the buildings aren't sold, then we'll develop them ourselves. But until that point of time, our model is to leverage state and federal historic tax credits when those credits are available."

The Main Street Lofts project is running months behind schedule.

Developers originally thought they would have their first tenants in place by early 2014. The project is being done in the city's "Creative corridor," which involves properties on Main from Third to Seventh streets.

The project called for a mix of commercial tenants and non-profits with a creative bent on the ground floor, including the Cranford Co., the Arkansas Repertory Theatre, the Arkansas Symphony Orchestra, Ballet Arkansas, as well as several artists and craftsmen in smaller spaces. Plans also called for up to 36 apartment in the Arkansas Building and another 34 units in the Cohn building.

Reed Realty and other partners paid $1.5 million for the three buildings and the Boyle Building at Main and Capitol. The Boyle Building was later bought by the Little Rock-based Chi Hotel Group for $4.6 million. However, the Chi group's plan to invest $18 million to convert the building into an Aloft Hotel, announced in April 2014, has also stalled. Plans called for the hotel to open in early 2016, but no work has been done for several months.

Business on 08/04/2015

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