Crane swings in wind as $8.3 million Raleigh project nears arbitration after two years of delay

hillsborough lofts crane
A Google Maps view of the site at 2504 Hillsborough showing the crane in place above the vacant shell

A crane has been swinging in the wind for two years in Raleigh, as a construction-project-gone-bad remains stalled in litigation.

The roughly $8.3 million Hillsborough Lofts, on Hillsborough St. across from NC State University, is supposed to be a 54-unit, seven-story apartment building with 10,000 sq. ft. of ground floor retail space. Originally, the project was to be completed in time for the 2015 fall semester.

But today it is an empty shell, and the crane is still there, hanging in the wind.

The project has been in legal limbo as arbitrators prepare to take up the case this July, the Raleigh News & Observer reports.

Like most legal disputes, there are different sides and perspectives to the story. The News & Observer reports:

Hillsborough Lofts terminated the contract with Wright Construction Services in December 2015 and immediately began arbitration against the contractor, said Hillsborough Lofts’ attorney John Mabe.

Arbitration is a legal process replacing a judge and jury with arbitrators. Proceedings and outcomes are typically private and legally binding.

In March 2016, Wright filed a lien against Hillsborough Lofts and filed to enforce it in May 2016. Several of Wright’s subcontractors also filed liens in connection with the project, and most of those claims have been resolved, (Wright Construction Services attorney Matthew) Bouchard said.

A second lawsuit, filed by Wright in September 2016 in Wake County Superior Court, alleges that company officials were misled into working with Hillsborough Lofts. It also alleges that Hillsborough Lofts made progress impossible by firing both the design firm and construction manager and not following through on things such as moving power lines.

Wright tried to make progress but had design questions, Bouchard said. Since designer Olive Architecture had been fired, questions weren’t answered quickly and that slowed progress. The contractor was then blamed for the delays and fired, and Hillsborough Lofts took control of the site and everything on it, Bouchard said.

Hillsborough Lofts believes Wright’s claims are untrue, and the allegations are related to the fact that Wright did not have a North Carolina license to act as a general contractor when it entered into the project, said Alkesh Shah . . . a manager of Hillsborough Lofts.

“The allegations made by the contractor are untrue and, frankly, just don’t make sense,” Shah said in a statement. “None of these allegations were made until after the problems arose with their performance.”

An online search from the North Carolina Licensing Board for General Contractors shows that Wright Construction Services, Inc. based in St. Louis MO currently has a valid North Carolina general contractor’s license, with a renewal date of Jan. 1 2017. However, this documentation does not disprove Hillsborough Loft’s assertions at the time the project started.

As for the crane, Bouchard says the rental was $13,877.50 per month. It sometimes appears to move, but that isn’t a ghostly message.

“They probably left it in a free-spinning state, and you may see it move depending on the strength of the wind,” Leon Skinner, Raleigh’s chief building official, told the newspaper. “I don’t know that anybody has been on that jobsite.”

Building inspectors have monitored the vacant site. They will reinspect it and make sure everything is safe when construction eventually resumes.

The parties Hillsborough Lofts, Wright and bond company Liberty Mutual are expected to begin private arbitration in July. Construction could resume this fall, said Hillsborough Loft’s Shah, the News & Observer has reported.


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