360 Market Square contractors spar over pay

A monthslong dispute among contractors working on the Whole Foods-anchored 360 Market Square project has escalated.

Plumbing contractor TGK Enterprises Inc. and several of its employees say they are owed hundreds of thousands of dollars for unpaid work on 360 Market Square, a 28-story apartment project at the former Market Square Arena site. The contractor, which does business as Enterprise Electrical & Mechanical Co., began working on the project in August.

But general contractor Lend Lease Construction Inc. counters that it has removed Enterprise from the project because Enterprise violated its "contractual requirements."

Enterprise on Jan. 7 filed a notice of intent to hold a lien seeking $504,218 from project developer Flaherty & Collins. In addition, six employees who have worked for Enterprise are demanding a total of $162,496, according to documents filed with the Marion County recorder's office.

Enterprise Controller Alison Lanier said the filings came after months of trying to extract payment from Lend Lease. Enterprise completed its underground plumbing work in December and went on hiatus, Lanier said.

Lanier said the conflict between Enterprise and Lend Lease centers on bonding, which is a type of construction insurance that protects project stakeholders if a contractor can't complete its work. Lend Lease typically requires subcontractors to be bonded, Lanier said. However, she said, Lend Lease let Enterprise work on 360 Market Square, even though her company acknowledged upfront it could not qualify for bonding because of its finances.

"They allowed us to do the underground work," Lanier said. "They allowed us to work there, and we are simply asking for payment for work performed. That's all we are asking. We are not being communicated with as far as when that will happen."

Although Enterprise is publicly seeking more than a half-million dollars, Lanier said her company would be satisfied with a $200,000 payment. Enterprise hasn't received any money since November, she added.

Lend Lease issued a statement in response to an IndyStar request for comment: "We have terminated Enterprise for failure to meet its contractual requirements. As this matter may be the subject of future litigation, no further information will be provided at this time."

Indianapolis developer Flaherty & Collins declined comment. Jim Crossin, the vice president of development for Flaherty & Collins, has repeatedly told IndyStar his company has paid its bills and it's up to Lend Lease to distribute money to subcontractors.

The latest action by Enterprise comes amid months of conflict among 360 Market Square contractors. The project's largest subcontractor, Midwest Constructors LLC, filed a $2.6 million intent to lien in November and has walked off the job in protest at least twice.

Enterprise also filed a previous intent to lien, seeking $569,000 in November. The company released the filing a week later because it received a payment of $279,000 from Lend Lease, Lanier said.

Enterprise then finished its work in December and left the project for a planned break. But Lend Lease informed Enterprise it was being removed from the project because of its lack of bonding capacity, Lanier said.

"To them, that was a good stopping point so they could kick us off the job," Lanier said. "Kicking us off the job is fine, but then pay us. Pay us for work performed — period."

A subcontractor that has worked under Midwest and Enterprise said Enterprise is putting too much blame on Lend Lease. Robert Hedger, the owner of Hedger Construction, said he performed excavating work under a $40,000 contract with Enterprise. When Enterprise paid only a quarter of the money he was owed, Hedger said he went to Lend Lease.

"Enterprise essentially told us to go file a lien against the job," Hedger said. "We went to Lend Lease and spoke with them, and they made sure we got paid. Lend Lease paid us the money for Enterprise. I respect Lend Lease for what they did on that one. Enterprise is throwing Lend Lease completely under the bus."

Lanier, though, said Enterprise couldn't pay Hedger because it's still waiting for money from Lend Lease.

"We gave him $10,000 out of our very first check," Lanier said.

The 360 Market Square tower, slated to be the tallest apartment building in the city, is among two projects under construction atop the former Market Square Arena site. The arena was demolished in 2001. Cummins Inc. plans to complete a 10-story distribution headquarters south of the 360 Market Square site by the end of the year. Crossin, of Flaherty & Collins, has said 360 Market Square is on pace to be completed by June 2017.

Although Crossin declined to address Enterprise's latest filing, he said in December that disputes among the project's contractors have not slowed progress on 360 Market Square.

"This really hasn't caused a delay in the project," Crossin said then. "I certainly don't want to sound unconcerned, because we are, but I would also say it's not unusual for contractors to have a disagreement."

Lanier, who filed an individual intent to lien seeking $32,307.72 in unpaid wages, said she wants to move on from the project.

"I just know I have employees that haven't been paid," she said. "I haven't been paid, and this job is our only source of income to get payroll caught up. As controller, this keeps me up at night."

Call IndyStar reporter James Briggs at (317) 444-6307. Follow him on Twitter: @JamesEBriggs.