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.
