Contractors say Marco Island Hilton owed $12M for renovations
The Hilton Marco Island Beach Resort & Spa shut its doors earlier this month after an electrical fire, followed by a flooding incident, caused extensive damage to the building. The hotel will remain closed until Dec. 1, 2017. Wochit
Two dozen contractors have filed liens against the property
Before the newly renovated Marco Island Hilton shut its doors in early June to repair fire and water damage, two dozen contractors filed more than $12 million in liens against the hotel for unpaid work from a $40 million renovation project, records show.
The number and amount of liens on the project are unusual, one contractor’s lawyer said, and show the hotel struggled through the large renovation project that promised Marco visitors a "best in class Gulf-front experience."
“Most well-managed projects do not result in construction liens,” said Barry Kalmanson, a lawyer for Kobrin Builders Supply Inc. “It’s not typical at all.”
Manhattan Construction, the general contractor for the first and 11th floors of the project, is one of the contractors that filed liens against the hotel. Its two liens total $7.5 million, with an additional $279,000 in interest.
Manhattan Construction is owned by U.S. Rep. Francis Rooney and his family. But he said he has removed himself from the business, and it’s now being run by his oldest son, Larry.
The Hilton renovation project began in June 2016 and included a redesigned 11th floor penthouse level with 16 new one- and two-bedroom suites. On the first floor, the resort added seven lanai junior suites with private lounges and direct pool access.
Other aspects of the project included an upgrade of the resort's 12,000 square-foot meeting space, the creation of a new event space on the lawn with a view of the Gulf of Mexico and improvements to the pool area.
The project originally was supposed to be completed in just over four months, and the hotel would be closed during that time. However, due to complications, the Hilton's re-opening was delayed almost two months.
Gordon Knapp, senior vice president of Manhattan Construction Southwest Florida, said the problems with the project largely stemmed from on-the-job changes requested by the Hilton.
“Lots of changes occurred during the life of the job, which isn’t unusual when you’re doing a major renovation. But that’s why it’s taking quite a bit of time to sort out the costs,” he said. “It’s a long and arduous process of going through each of the changes that were made as the work was being done.”
In the meantime, the subcontractors have to protect themselves, Knapp said; hence, the liens. He said the hotel has been cooperative throughout the process, and he expects the issue to be resolved in the next 45 days.
“We’re working through things with the owner and subcontractors, and we’re confident everything will get resolved,” he said. “There are constant meetings going on, and our goal is to protect ourselves and our subcontractors. It’s very important to us that they’re treated fairly.”
Pelican Electrical Group Inc. filed a sizable lien against the Hilton, totaling almost $1.25 million. The company completed about $4 million in electrical improvements in February, and filed its lien April 3.
It completed an additional $200,000 worth of electrical work in March, and filed another lien June 23 in the amount of $15,752.18.
Another subcontractor, Acousti Engineering, which was responsible for interior finishes, argues it has not been paid at all. The company finished work on the hotel in October. Its lien is for $17,250.
Consel Inc. of Florida was the first contractor to file a lien against the Hilton. It installed just over $500,000 worth of helical and wooden piles in September 2016 and filed a lien in the amount of about $62,000 in December.
The other liens quickly followed for a total of 30 in just over five months. The type of work ranges from roofing to plumbing to concrete masonry services.
The Hilton has paid two of 24 contractors that filed liens against the property. Kobrin Brothers Supply filed a notice of a pending lawsuit before it was paid.
“We filed an action to foreclose the lien,” Kalmanson said, "which means the lien would appear before a judge who has the power to enforce it."
A foreclosure of a lien is similar to the foreclosure of a house, he said, but with one key difference: it's involuntary for the property owner.
Kobrin Builders Supply Inc. completed its work on the Hilton on Jan. 9 and filed a $50,783.83 lien against the property Jan. 20. When six months passed and the Hilton still hadn’t paid, Kalmanson filed for foreclosure. The Hilton then paid the full amount owed, and the contractor released its lien.
Vincent Bucci, the Marco Island Hilton’s managing director, said the hotel is in the process of settling the rest of the liens.
“We are aware that certain contractors have filed liens to reserve their rights relating to construction activities at the hotel,” he wrote in an email. “We remain committed to working toward a successful resolution of these matters with the general contractor, Manhattan Construction, and related subcontractors.”
The Hilton is in the midst of another major renovation after a June 9 electrical fire caused $1 million in damage, according to the Marco Island Fire-Rescue Department's incident report.
The hotel was damaged further three days later when steel plugs burst from old sprinkler pipes in the ceiling and caused extensive flooding on the hotel’s third and ninth floors, according to a Marco Island police incident report.
Hotel officials said the Hilton should be fully operational by Dec. 1.
Representatives of Olshan Properties, the company that developed and operates the Marco Island Hilton, could not be reached to comment.
With its affiliated companies, Olshan Properties owns or manages a hotel portfolio of six properties, including three in Ohio, one in Illinois, the Sheraton Suites Galleria in Atlanta and the Marco Hilton, along with commercial, retail, and residential properties in 11 states.