The latest problem facing the stalled construction on the X Phoenix luxury multifamily tower on West Van Buren Street is a series of lawsuits filed by the general contractor and several subcontractors against project owner The X Company.
Construction on the second phase of the development was halted abruptly nearly a year ago. The X Company has also been dealing with construction issues at other project sites around the country.
After work stopped last September, several companies associated with the project filed mechanic’s liens trying to secure payment for their services. Starting in April, several of those creditors began filing lawsuits.
General contractor Clayco Inc.’s lawsuit is the largest. The company claims that as of May 17 it is owed at least $32.3M for its work and another $3.9M in interest. Clayco is claiming breach of contract due to The X Company’s alleged failure to pay its debts in a timely manner.
Other companies that have filed litigation include Suntec Concrete Inc., Action Gypsum Supply West LP, Apodaca Wall Systems Inc., White Cap LP, CM Builders Inc. and Metal-Weld Specialties Inc.
In March, Clayco sent The X Company subsidiary XSC Phoenix Investment 2.0 LLC a notice of intent to terminate its contract for nonpayment. Clayco then extended the termination date until May 3 to allow the company time to pursue new financing options. XSC conceded Clayco was owed more than $30M and was entitled to costs incurred from the suspension of activity.
The X Company had entered into a Government Property Lease Excise Tax agreement with the City of Phoenix. In exchange for property tax abatements during construction, Phoenix is listed as the property owner. City officials have been in talks with The X Company and expressed hope the firm could secure financing and move forward, particularly since the stalled phase and the completed first phase are intended to connect and share an amenity package.
Should it prove necessary, the City has the option to put the developer in default under the original agreement. (Source)
