Building flaws in City Springs, Sandy Springs’ year-old civic center, have spawned dueling lawsuits between the city and its construction company.
Holder Construction, the company that built the complex, is suing for $2.6 million in overdue payments. And the city is counter-suing, claiming Holder breached its contract, built with negligence and committed fraud. The city is also suing Rosser International, the project’s design firm, which appears to have gone out of business.
“We had worked with the city many months,” said David O’Haren, Holder’s chief financial officer, about the lawsuit. “They were just not forthcoming.”
“The [city] is obligated to ensure that the citizens of Sandy Springs receive the quality work Holder was contracted to provide,” City Attorney Dan Lee said in a press release.
Holder was hired in June 2015 as the construction manager for the public parts of the civic center, which includes a City Hall, the City Green park and the Sandy Springs Performing Arts Center. The complex, budgeted at roughly $229 million, opened in phases in 2018.
Holder filed suit in August for $2,569,164, saying that is the amount the city failed to pay it between September 2018 and January 2019, plus a monthly interest rate of 1.5%. That includes money for work on a cistern — an underground tank that captures rainwater — and the low-voltage wiring systems used in the building.
The city’s counterclaim was filed in the name of the Public Facilities Authority, which is the members of the City Council operating as a separate entity for legal reasons so it can manage public property. The countersuit claims the project has construction issues and it withheld money pending repairs or completion. The lawsuit claims the cistern was deficient and that repairs will cost more than $750,000. The suit also claims the low-voltage wiring system was not installed correctly and that Holder’s installation subcontractor submitted falsified reports.
The city says its contract with Holder allows the PFA to withhold payment until all work is successfully completed.
“While these deficiencies represent only 1% of the overall project, we want 100% of the work done correctly,” Mayor Rusty Paul said.
“That is where it really hit a snag — basically where the city was saying, ‘We’re not going to pay any more,’” O’Haren said.
The city hired Rosser International to create a design of the cistern, and Holder was only in charge of building what was on the drawings, O’Haren says.
“They seemed unhappy,” O’Haren said. “We were simply doing what was on the design.”
Rosser has is no longer in business and could not be reached for immediate comment.
Paul said the PFA was disappointed to see the lawsuit filed.
“Frankly…we believed we were making solid progress with Holder in negotiating a resolution to these issues,” Paul said.
However, O’Haren said the city does not seem to want to solve the issue.
“We are a little frustrated we have had to get to this point,” O’Haren said. “The city just did not seem to want to get this resolved.”