Steamboat Springs The general contractor that built the Steamboat Grand Hotel has filed suit in district court here seeking to have a $5.4 million lien against the hotel owners foreclosed on, and further requesting that the court appoint a receiver to take possession of the property.
A spokesman for Grand Summit Resort Properties Inc. in Steamboat said Friday the two sides are talking and working toward a resolution.
"Settlement negotiations are literally under way as we speak, Tim Greene said. "We expect resolution to be soon."
Greene is vice president for real estate for American
Skiing Co. Resort Properties, Steamboat.
Skip King, vice president of communications for American Skiing Co., said a settlement has been reached but did not offer any details. King said he believes the suit will be withdrawn.
The suit was against Grand Summit Resort Properties Inc. by contractor Colorado First Construction/PCL. The company is actually a joint-venture partnering two construction firms that undertook construction of the hotel together. Also named as defendants in the suit are all of the individuals and entities who have purchased quartershares in the hotel, as members of the homeowners association.
The request for judgment by the attorney for the contractors seeks to have the Routt County Sheriff sell the hotel if necessary to satisfy the lien. It also seeks a court-appointed receiver to take over the property to manage it and collect rents and profit as a means of satisfying the contractor's complaint.
The suit centers around millions of dollars in expenses CFC/PCL says were caused by change orders that went way beyond its contract with Grand Summit Resort.
More than 600 change orders were executed before the hotel was finally complete, according to the suit.
Grand Summit Resort is the business entity created by American Skiing Company, parent of the Steamboat Ski Area, to build and market the hotel on Mount Werner Circle. Work on the Steamboat Grand began in July 1998 and the hotel opened in October 2000.
The suit claims CFC/PCL is currently owed more than $11 million for labor, materials and services that went into the hotel construction. The original contract to the build the hotel was for $70 million, according to documents filed by Attorney Michael J. Cook of the Denver legal firm Sherman & Howard, on behalf of his clients.
Cook did not return phone calls on Friday.
About 10 months after construction had begun, the contractor and its clients renegotiated their contract to reflect a major change order. But the changes didn't stop there.
"In approximately May 1999, Grand Summit and CFC/PCL negotiated Change Order No. 2 to the contract, which added $3,058,246 to the contract price and yielded a new completion date of Jun. 6, 2000," the law suit states.
The law suit goes on to say that the Grand Summit breached its contract by failing to provide design and construction drawings in a timely fashion. It also charges that the company failed to ensure that "design parameters" were consistent with local building codes.
"The project was plagued by numerous changes throughout construction," the complaint charges. "In fact, contrary to the understanding at the time change order No. 2 was implemented, there were (more than) 600 subsequent changes to the project. As a result of these changes, CFC/PCL incurred costs for which it is entitled to additional compensation."
The complaint says the contractor's entitlement to more money arises from out-of-sequence work, delays, disruptions, overtime, acceleration and lost productivity.
In September 2000, CFC/PCL submitted a change order request for additional compensation in the amount of about $9 million.