Sandy Springs, construction company file lawsuits over City Springs

Exterior of Sandy Springs Performing Arts Center, a part of City Springs, a $229 million arts-and-government complex. HYOSUB SHIN / HSHIN@AJC.COM
Exterior of Sandy Springs Performing Arts Center, a part of City Springs, a $229 million arts-and-government complex. HYOSUB SHIN / HSHIN@AJC.COM

Sandy Springs is embroiled in disputes with the companies that designed and built its $229 million city hall complex, City Springs.

The city has been accused of failing to pay Holder Construction $2.6 million, and not paying invoices due since last September. The company has sued Sandy Springs for the money, and city officials last week countersued Holder for breach of contract, negligent construction and fraud.

Additionally, Sandy Springs sued the project's architect, Rosser International, claiming <span style="background-color: #ffff88;"></span>the company prematurely declared the project complete and caused the city to overpay.

The complex opened about 18 months ago.

Dave O'Haren, Holder's chief financial officer, said the company filed suit after feeling Sandy Springs had backed them into a corner. The city would not let Holder perform warranty work to fix issues that were found <span style="background-color: #ffff88;"></span>after the project was substantially completed, he said, and will not pay for the work that was done.

“It’s been frustrating for us,” O’Haren said. “We thought we had a happy client. We thought we did a good job.”

There were several issues that were found after Sandy Springs occupied the facility, which includes a performing arts center as well as city hall. Low-voltage wiring wasn't installed correctly, the parties agreed, and a wall in a cistern collapsed.

Dan Lee, the Sandy Springs attorney, said there were also leaks in the roof of the performing arts center.

O’Haren said Holder informed the city of the wiring issues after discovering a subcontractor had falsified tests. He said the company has been replacing the wires at no additional cost to Sandy Springs, and that the cistern wall collapsed after only half of it was filled.

Holder has braced the wall, but O’Haren said the company has not been allowed in to make a permanent fix.

“These could be resolved if reasonable people sat down and said, ‘Let’s resolve it,’” O’Haren said. “We haven’t been able to get to that point with the city.”

Lee said the wiring problem affected wifi and the building’s security, and that the contract allows the city to withhold twice the amount of the fixes until all the work is done. O’Haren disputed that claim.

But Lee said Holder “failed miserably” in its role as construction supervisor and the city no longer trusts the company to perform the work.

“Holder has to perform,” Lee said. “We didn’t get what we contracted for. We have a duty to make certain we get what we paid for.”

The complex is still functional, Lee said, but the issues are irritants that detract from the building. Both O’Haren and Lee said they viewed the lawsuits as a last resort.

Lee would not comment on the suit the city filed against Rosser last month. A phone number for the company did not work, and no one responded to messages sent through its Facebook page or its website. Reports indicate that the company dissolved earlier this year.

In its lawsuit, Sandy Springs said Rosser allowed unauthorized substitutions for materials used on the the project and said it improperly certified payment applications submitted by Holder, causing the city to overpay. The city called Rosser negligent, and said the company breached its contract.

Joe Henner, an attorney representing Holder, said the city’s allegations against Holder are “ridiculous” and inaccurate. Holder, a 60-year-old construction company, built Mercedes-Benz Stadium, the National Center for Civil and Human Rights and other notable projects in the metro area.

“There’s no question that we’re owed the money and we’re going to get the money,” he said. “The fact that Sandy Springs and Holder won’t be able to close out a job is just shocking to me.”

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