Tommy Spinosa’s construction company, Echelon Construction Services, is at the center of numerous liens and lawsuits in St. Tammany Parish for failure to pay its subcontractors for work done on a multi-family residential and retail complex in Mandeville known as the Chenier Apartments and Shops. In a series of suits that—on the surface at least—have a striking resemblance to the lawsuits that led to foreclosure proceedings against Spinosa’s Perkins Rowe development last summer, nearly 20 subcontractors filed lawsuits and liens between January and October of this year claiming Echelon owes them at least $2.2 million.
In various answers to the suits, Echelon claims that among the reasons it hasn’t paid the subs is because the project’s owner—Chenier Property Partners—has withheld $3.14 million from Echelon. That amount is the final draw of a $30-plus million contract Echelon entered into in January 2007 with the Metairie-based group of investors to build the project on U.S. Highway 190.
Court documents, however, indicate that several subcontractors weren’t being paid long before the final draw was withheld from Echelon early this year. SWC Services, for instance, which provided labor and construction equipment, wasn’t being paid as far back as September 2007. It was owed a total of $122,500, though it eventually reached a settlement agreement with Echelon’s bonding company, Traveler’s Insurance. Another company that hasn’t settled, however, is Cole’s Rental World. It has been owed more than $78,000 since September 2008.
“The thing that’s really troubling to us is that we pretty much haven’t been paid from the beginning,” says Carl Conrad, whose client Wilserv is owed $44,000 for mirrors and shelves it installed in the apartments. “If they were holding back 10% payment from all the subs, that would be one thing. But they’re holding back a lot more than that.”
In court documents, Chenier says it withheld the final payment from Echelon because the contractor did not satisfactorily complete the punch list. What’s more, Chenier claims that Echelon repeatedly refused requests for a certification of actual cost, which is required in its contract. That is also required by the U. S. Department of Housing and Urban Development, which is involved in the project because it insured the mortgage.
In court documents, Chenier alleges that “Echelon’s continued willful refusal to submit its certification of actual cost to Chenier has resulted in Chenier incurring fees from Chenier’s financial institution … In addition Echelon’s continued willful refusal to submit its certification of actual cost to Chenier prevents Chenier from fulfilling is contractual obligations with HUD.”
In court records, Echelon does not address the specific allegation that it refused to provide a certification of actual cost. It argues, instead, that its contract with Chenier calls for the two sides to seek arbitration should disputes over performance and payments arise. Spinosa’s attorney, Brian McCullough, did not return calls for comment, nor did New Orleans attorney Lloyd Shields, who represents Chenier. Spinosa and his representatives did not return repeated calls for comment.
Attorneys for the various subcontractors, however, say their clients have been hit hard. Baton Rouge attorney John McLindon represents two subs. Wilcox Trim and Labor is owed more than $126,000, and BMC is owed $12,000 for millwork.
“He’s a small business,” McLindon says of BMC. “That’s a big hit for him.”
This story has been changed since it was originally published.
Comments
Posted by mdavis03 on November 9, 2009 at 4:18 p.m. (Suggest removal)
Spinoza can't pay for the mess he made at Perkins Rowe or at St.Tammany suites, but he should be approved to push forward with Rouzan?!
C'mon - you Republicans can't even get on board with this with a straight face!
Posted by Fred on November 9, 2009 at 7:30 p.m. (Suggest removal)
Do I smell the Southside Civic Association? I think so...
Posted by Fred on November 9, 2009 at 7:34 p.m. (Suggest removal)
BTW, thank God that there are still reasonable people on the planning commission.
Posted by Being_Stupid on November 10, 2009 at 8:27 a.m. (Suggest removal)
Love how the Southside Civic Gestapo thinks they somehow have rights to property they do NOT OWN nor is even located inside their Big Brother Neighborhood.
Hey Southside! I accidentally parked my car on a blade of grass last night. I left the trashcan out for over 10 hours. My swimming pool is only half full and is full of turtles and frogs. I haven’t edged the sidewalk in over 3 months! My mailbox is crooked. And I have Jews hiding in my attic! Come and get me!
Nevertheless, that being said…
FOR ONCE… I will agree with the Southside Neighborhood Lynch Mob on 1 major point when it comes to Developer Tommy Spinosa.
You got to Pay 2 Play!
This news about the countless lawsuits and Tommy not paying his contractors is unsettling. Every businessman knows that you have to pay your contractors for their services. Nobody has respect for people that stiff their workers. No contractor is willing to work for a person or company that has bad credit history.
Not paying for a service = Stealing.
But will agree with Kathleen Callaghan & other PC members that an applicant’s bad credit history has nothing to do with the site plan approval process.
Smokie = Southside Civic Gestapo Henchman = Metro Council Pawn
Smokie did well when he stood up for the Caterie’s Property Rights earlier this year and got the MC to reverse their decision on the CAB-2 Rezoning, but what is his deal now? Ever since he opposed the St. Joseph’s Academy Parking Lot – the Big Mouth Metro Council Member has become a pawn of the Neighborhood Gestapo Associations.
Posted by fulldisclosure on November 10, 2009 at 8:49 a.m. (Suggest removal)
Smelling South Side Civic Association? Even so, they did not create Spinosa's legal or financial issues, which are a matter of record and becoming a standard Spinosa business practices. Should they really be hidden when considering another partnering relationship with him when the last (2) deals are in financial turmoil. Maybe the timing is not on Spinosa's side again.
Baton Rouge maybe becoming progressive, but don't think we are dumb. Spinosa, even if you get your projects. You will always OWE this community for bailing you out. We are a generous christian community that has risen to the numerous charitable causes consistently since Katrina, including your causes to stabilize the Louisiana economy.
However, it appears now Spinosa's Business Creed is becoming:
1.)I have no problem starting projects that I will build without consensus or full disclosure
1.) I promise not to show up at any of the Planning Commission required meetings or follow protocol.
2.) I never intend on paying my bills.
3.) I will leave you with a project that no one can afford that does not drive the economy. (Leaving us with national retails that take money out of our economy nightly)
4.) I will declare bankruptcy and create havoc with your construction industry in a down turning economy.
5.) I will undermine your collective community spirit.
6.) I will systematically disrupt the community values of personal responsibility and replace it with consumerism.
I WILL CHANGE BATON ROUGE FOREVER THROUGH BANKERS TOO DUMB TO LOAN MONEY TO ME THAT I WILL NEVER GIVE BACK.
Baton Rouge Stand Up for your hard earned money.
Shopping Retail is not Economic Development.
It is a crafty way to separate you from your savings.
DEMAND BETTER JOBS to support these type of projects.
Posted by Fred on November 10, 2009 at 1:31 p.m. (Suggest removal)
So now in Baton Rouge it's assume someone is guilty until proven innocent!
And if someone is trying to sue someone it's okay to make him or her stop a project even though a judge or jury has not found any guilt.
If we tried to prevent developers from stopping a development because of pending lawsuits and liens nothing would get built.
Now Smokie Smokescreen is going to make a motion in the Metro Council to stop Rouzan because Sponosa is being sued and one of his company's may go bankrupt. Even though it has been proved that he has sufficient funding for the Rouzan project.
Yes there is a 600 pound Gorilla in the Room and his name is Smokie Smokescreen.
Come on Baton Rouge, we're better than this.
Posted by Being_Stupid on November 10, 2009 at 2:01 p.m. (Suggest removal)
Agree, Fred. Good Point...
Innocent until proven Guilty.
DEVELOPERS AVOID OPENNESS, because if they are open and fully disclose everything they want to develop… they know that about 100 CLOSED-MINDED Neighborhood People will show up to oppose their development and the MC or PC won’t pass it.
Posted by Being_Stupid on November 10, 2009 at 2:51 p.m. (Suggest removal)
Smokie is not Alone. All the council reps act differently when it comes to Development in their District. Take Alison Cascio for example...
She proclaims herself to be a strong supporter of Mixed Use and Smart Growth Development… or is she? She recently recommended denial of an Office ISPUD along Jefferson Hwy, and last summer recommended denial for a Conditional Use Permit for a Church at Bluebonnet & Oliphant. Mixed Use and Smart Growth is okay THERE, but NOT HERE in District 11” should be her next campaign slogan in 2012.
All the council reps act differently when it comes to Rezoning in their District. Not only do you have to contend with opposition from your own Council Representative (even at a PC Meeting). Then to make matters worst…at least when it comes to MC Rezoning Meetings, there is always at least another Representative who is absent. Then you got 3 reps that can’t make up their minds and always want to defer the case (like Tara Wicker). Then if you are rezoning CAB-2 you got a few others (like Joel Boe) who will absolutely vote to DENY because they are die-hard God & Beer Fearing Christians and have a Moral Opposition to drinking alcohol. And then it takes 8 EIGHT APPROVAL VOTES to approve your rezoning effort or project??
So much for “OPEN-NESS” and FULL DISCLOSURE.
More like a CLOSED-MINDED and FULL-DENIAL process from the proceedings and countless good developments I’ve seen denied thus far in 2009.
- Neighborhood Office Denied on 5 Lane Perkins Road near Siegan
- Art Gallery Denied on Perkins Road near Overpass/LSU
- Spanish Latino Dance Hall denied on Florida Blvd next door to Texas Club
- St. Joseph's Academy denied Conditional Use Permit (CUP) for parking lot.
- Presbyterian Church Denied CUP for Church on Oliphant at Bluebonnet.
- Lawyer Office will most likely be denied ISPUD on Jefferson Hwy
- Preis left in Limbo over Spanish Town HPC Lawsuit.
Why even try? Nothing is being built in Baton Rouge and people wonder why?
Posted by fulldisclosure on November 10, 2009 at 8:36 p.m. (Suggest removal)
Pay your contractors.
There are many developers that manage progressive projects effectively and do not cause construction industry havoc. They actually manage the projects approriately with oversight, timing and protocols. Everyone should be sensitive to business lines of credit these days. timelinereimbursements. The practice of consuming other peoples credit creates industry instability. Banks should consider these patterns when firms are being damaged. This behavior of not supervising products and then not closing the contracts is negative business culture that is unhealthy for Louisiana's economy. If Spinosa eliminates local construction industries by consuming their working capital he eventually excelerates price fluctuations through a false hood not through real economic variables. This is unstable for all parties. No one is saying don't be progressive- we are saying lets not glorify unstable financial practices. Smart growth also means smart financing. Katrina and the economy has taken Louisiana credit lines for a ride let's not make that our future. Smart growth also means sustainability.
Baton Rouge can illustrate Smart Growth
Lets just be Smart about it. More transparency and more oversight appears to be warranted in the current conditions.
Posted by fulldisclosure on November 10, 2009 at 9:06 p.m. (Suggest removal)
Fulldisclosure is not for the council, the planning commission, or the neighborhoods - it is for the project partners. They are the only ones at risk and the only ones to provide oversight. But ultimately these reported issues are not about smart growth projects but how project partners and subs are being treated once they have invested in a project. Kudos to the Business Report for informing the business community of relative details for informed decision making.
Posted by Being_Stupid on November 11, 2009 at 7:39 a.m. (Suggest removal)
Agree, fulldisclosure.
Although the lawsuits are not settled yet, like Fred pointed out.
From the news I have read, and numerous contractors that have filed suit against Spinosa's firm, definitely appears Tommy Spinosa is not paying his contractors. At the same time...I don't think the RealEstate Market has gone his way either. Don't see anybody buying a TND condo for $200K+ when you can buy a house for the same price a couple blocks away. Nevertheless, I like Spinosa's ideas and projects, and in the near future there will be a need for his TND developments.
But my problem is with the little Developers and Small Business Owners, that get no or little news coverage and have their projects denied because of the obstacles they must encounter during the zoning process.
I also find it hypocritical how Troy Bunch, Planning Staff and some in the council (and previous council) will go out of their way to help Tommy Spinosa's TND, but then recommend denial for the same type of Mixed Use/Smart Growth/Compatible Development in other areas, just because it's a smaller project or Small Planned Unit Development (SPUD). Like the recent lawyer at Keed & Jefferson who tried to rezone his property to an i-spud for a law firm. Doesn't make sense to support a multi-story TND in one part of EBR, and then deny a much smaller lawfirm ISPUD in an other part of EBR.
Don't know what Spinosa did to get on Troy Bunch and the Planning Staff's (bribe) good side.
Posted by Being_Stupid on November 11, 2009 at 7:55 a.m. (Suggest removal)
Okay - Troy Bunch and the Planning Staff are not taking bribes - that was a very unfair comment by me - but they are definitely inconsistent at times. And definitely seems some applicants have better success with getting Planning Staff Approval than others.
Furthermore, agree with Mike Walker's move to shoot down Smokie's motion to reconsider the PC Decision.
Posted by fulldisclosure on November 11, 2009 at 8:24 a.m. (Suggest removal)
Agreed. The large smart growth project consume the attention and general resources because of the high school pop psychology of wanting to be in the "in crowd"- unresolved issues continuously repeated. Enough said about that.
But the large projects are actually counter productive to smart growth principals that they expound. They are a way to illustrate concentrated practices on a single site. But a Smart Baton Rouge would give more focus to the smaller project efforts and drive connectivity. This how municipal landscape changes. The articles on Spinosa just illustrate regardless of his assurances to be the Smart Growth advocate the movement can not be singularly invested. Even he is having trouble. He should focus his time on the collective community of builders to help him reach his goal not drive them into financial instability. This principle works in a good economy but it is particularly effective in a downturning economy . But they may not be his style but that may be want the market demands. Pendulums shifts to provide market checks and balances.
Posted by fulldisclosure on November 11, 2009 at 8:31 a.m. (Suggest removal)
The real question is . . .
Is Spinosa are Smart Growth advocate illustrating a new building philosohy- like his national media outreach claims
Or is he ....
The competitive architect from Ayn Rand The Fountainhea
that is buying his way through the processes to fullfill and obsession at any cost
if the latter then project partners beware
if the former then project partners then the finanical float is your education cost to learn Smart growth practices from Spinosa
Posted by Hedgehog on November 11, 2009 at 10:58 a.m. (Suggest removal)
STUPID, a few influential developers seem to have control over the government of Baton Rouge.
Being--Stupid, you wrote in an earlier column that you ate dog biscuits, well, EAT ALL THE DOG BISCUITS YOU WANT.
In your P-brain way, you imply that those of us who have bothered to purchase our own homes should let rampant overdevelopment rule the day.
As I have said to you before, THERE IS A VILLAGE OUT THERE THAT DESPERATELY NEEDS AN IDIOT, WHY DON'T YOU MOVE THERE.
Posted by Being_Stupid on November 11, 2009 at 12:15 p.m. (Suggest removal)
I prefer to be called the Parish-Idiot.
EBR is a Parish, not a Village.
Posted by brgirl on November 11, 2009 at 9:17 p.m. (Suggest removal)
This totally amazes me! I can't understand the hold this man has on city officials. It defies logic. I'm afraid that, like Swaggart, (with his failed empire and the derelict structures that remain), once the ball begins to drop, and it will – it already has, we will all have to suffer the consequences
The city is so caught up in “Smart Growth.” What is that exactly? As for the concept of TND’s (Traditional Neighborhood Developments), I have this to say. I grew up in a Traditional Neighborhood Development in New Orleans, back in the 50’s. I can tell you, the current definition doesn’t apply. To make matters worse, those pushing the concept have also been pushing the term “urban sprawl.” This provokes images of some horrible blight, like living in a slum. Urban sprawl is nothing more than a neighborhood of single family residences with yards. I believe it’s called “The American Dream.”
The Baton Rouge Business Report hit the nail on head when they stated in their story, “An urban planner’s nightmare,” that “a political process has created a perception, among some, that the fix is in and that those people with money and power ultimately get their way.” That’s no perception. Wealthy developers, contractors, investors and others with the help of local government officials, are biting at the bit to get a piece of the pie because it is more profitable for them to sell a piece of property, multiple times over, as condos or multi units, than it is for them to sell a single family dwelling. But I can guarantee you that most proponents of “smart growth” don’t live in such developments. What makes “smart growth” attractive to local officials is that, per square foot, there is more of a tax base to draw from, because everyone is living on top of each other The only thing that high density developments eventually promote is urban decay and crime.
Take a good hard look around this city. Maybe the reason that the city has ignored our traffic, sewer and drainage problems for so long is because they realize that the citizens will begin to flee from those neighborhoods, affected by the problems, causing the property values to plummet, making the areas more attractive for developers to buy up, so they, too, can be turned in to TND’s, PUD’s or whatever else if popular at the time.
I find it very unlikely that, in light of Mr. Spinosa’s current financial crisis that any intelligent lending institution, contractor, subcontractor or supplier would be foolish enough to make the same mistake twice. And, in light of all the media coverage concerning his track record, including his latest difficulty in St. Tammany Parish, I doubt that few, if any, new players would want to play ball, given the facts.
We all strive to be successful in our endeavors. But before pushing a concept, any concept, it is well to look at all sides of the argument. That provides balance. Balance is what is seriously lacking in this community.
Posted by fulldisclosure on November 11, 2009 at 10:15 p.m. (Suggest removal)
Well it has been reported that a Texas bank has shored up his financing on this new deal ( probably a savings and loan veteran)
Yes these actions will forever change the Baton Rouge landscape
on so many levels.
It is amazing how many influential people are willing to lay down their authority and responsibilities for this individual without concern of his bad management.
Posted by Being_Stupid on November 12, 2009 at 12:22 p.m. (Suggest removal)
We can all agree that somehow Tommy Spinosa got on Troy Bunch's good side.
But, what I don't understand, is why small developers or business owners, like the lawyer who wanted to put an art gallery on Perkins Road can't get the same support from the Troy Bunch Planning Staff?
I like the proposed Rouzan TND, by why not allow for a small art gallery too?
TNDs are a good idea. Anyone who complains about Perkins Rowe or Rouzan is obviously very closed-minded or blind. I think the Perkins Rowe Development was well done. Unfortunately the workers who built it are not getting paid.
Posted by Being_Stupid on November 12, 2009 at 1:15 p.m. (Suggest removal)
I definitely like what has happened to Jimmy Swaggart’s Bible Paradise.
- The New Mall
- Perkins Rowe TND
- Mike Wampold’s Hotel will be next.
If you want to see SMART GROWTH and MIXED USE Development, just drive down BLUEBONNET.
Bluebonnet Road and Bluebonnet Blvd, Urban Design District #1 (UDD1) – Office Corridor, are all prime examples of MIXED USE and SMART GROWTH Development Principles.
Proper Landscaping, Hidden Electrical Lines, Hidden or Rear Parking, Multi-Level Parking, Landscaped Boulevards, Attractive Signage, Safe Community Atmosphere, Proper sidewalks and vehicle access. Shops, Office, Commercial and Recreation in walking distance to Residential (which reduces commuter time and automobile traffic)
This is SMART GROWTH and MIXED USE DEVELOPMENT.
I commend the Troy Bunch Planning Staff, PC, & MC for encouraging this type of smart growth development along Bluebonnet and for big projects like Rouzan, but question why they then oppose smart growth/mixed use when it comes to smaller developers or business owners who want to do the same thing, but on a smaller scale?
Just because a business owner can’t afford to build a TND, doesn’t mean he or she can’t build a very nice ISPUD, Art Gallery, or Neighborhood Office Development that will enhance and transition well between commericial and residential like a TND or UDD.
Posted by fulldisclosure on November 12, 2009 at 1:31 p.m. (Suggest removal)
Often a large project wants the Green Light for the project sooooo badly they don't LISTEN to justifiable critics that are in the best interest of the project. They are many mistakes and conditions in Perkins Rowe that could have had minor adjustments that would have turned a range of critics into support and not jeopardize the integrity of the project.
Claims that Perkins Rowe is an illustration of SMART GROWTH is even a stretch.
1,) It is an illustration of vertical development instead of urban sprawl.
2,) It does not use native vegetation- so horticulturally it is not GREEN.
3,) It has huge media displays with no solar power offsetting so it is not really Energy GREEN.
4.) It's drainage capacity has already experienced back ups in some of the rain events we recently had which have not be hurricane level events. So it was not built for perfect drainage, better but not best.
5.) From a public safety commment it has many dark corners with out cameras in the parking area that put people at risk.
6.) Traffic has limited flow still, it needs back side connector feeds to the back entrance of MALL. (which may or may not happen?)
7.) And, economically it missed the interior designs of the living units for potential purchases. The Price too high for 20s year olds and the decor leaves 30s and 40s uninterested because of the dorm room styles for the price tags. So he will virtually have to wait until Young Urban Professional can afford 200K worth of debit on their own credit on top of college loans. ( which is a bad fiscal precedent for our town to rob our young urban professionals of their family seed money immediately after college) It might have been better targeted to downsizing baby boomers with better unit floor plans. (they have the investment money and could maximize the restaurant spaces) Or economically mixed units for a diversified residential appeal.
To say that any statements are CLOSED MINDED or BLIND, is not correct. The development is unique to Baton Rouge and has simply illustrated a vertical model for consideration for future building development. But, to say it is perfect and without faults and limitation is over glorifying. To say that Spinosa would not benefit from LISTENING to people's comments is CLOSED MINDED.
But, to his credit it was a huge cute project, but we hope that he would get better with experience and not worse with sloppy influence peddling. Spinosa take the time to refine your ideas and craft and become the persona of your media hype. Take time to build the community to support your structures.
So far you are a developer with general developer financing issues in a normal economic downturn. A path to achieving your goal would be to start with the criticisms, listen to your critics and judge each statement for validity for wisdom on your next project.
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