Thursday, December 25, 2014

Miami Heat vs. Arquitectonica: Rare airing of dirty laundry in Miami … by gimleteye

On the one hand you could call it the flinging of sharp elbows, which Miami Heat stars know how to do perfectly well, on the other hand if you were in the cheap seats as a taxpayer and wondering why few fiscal benefits ever materialized from the Alex Penelas-era deal to build an arena for the Heat on Biscayne Bay, you would look at the Christmas eve lawsuit by the Heat (or related entity) against the city's "premier architect" (Herald's description in "Miami Heat affiliates sues Arquitectonica over arena cost over-runs") as a rarely opened window into the money and politics of growth in Miami.

Whatever your conclusions (Arquitectonica is the designer of the upcoming and hotly contested Nail Clipper Building for which funding is promised -- in addition to taxpayer contributions of at least $9 million -- through the sale of visas to wealthy foreigners), take the opportunity to comment on today's uncharacteristic glimpse. We will be looking for a fully copy of the lawsuit to post online.

"A company tied to the Miami Heat waited until Christmas Eve to sue the city’s premier architectural firm over a long-simmering, multimillion-dollar dispute over design and construction of downtown’s AmericanAirlines Arena, which opened its doors 14 years ago.

Basketball Properties Limited, the Heat sister company that manages the Miami-Dade County-owned arena, claimed in its sharply worded lawsuit that Arquitectonica was in over its head when it took on the project — and that the firm appeared more concerned with making a name for itself and racking up fees than with meeting deadlines and sticking to a budget.

Arquitectonica’s “self-aggrandizement turned out to be fiction,” the lawsuit says.

Basketball Properties, which filed its lawsuit Wednesday afternoon in Miami-Dade Circuit Court, wants Arquitectonica to pay millions of dollars to cover cost overruns and years of legal expenses. An attempt to reach the Coconut Grove-based Arquitectonica through its publicist late Wednesday was unsuccessful.

According to the lawsuit, Arquitectonica repeatedly failed to provide building contractors with plans when they were due, forcing construction crews to work overtime and on weekends — on Basketball Properties’ dime — to open the arena by Dec. 31, 1999, as scheduled. That created chaos on the construction site, the suit says, with plans changed on the fly and “millions of dollars of wasted manpower and materials.”

“Workmen would arrive in the field with nothing to do until drawings could be redrawn,” the complaint says. “Thousands of feet of extra ductwork, electrical, plumbing and piping had to be used to work around mistakes.”

Among the costlier mistakes: failing to measure the size of air handling units, which wound up not fitting where they were supposed to under the roof trusses — requiring already constructed walls to be moved and an entirely new duct system to be put in place. The “mistake of inches” cost $1.2 million, the lawsuit says.

The complaint also alleges that Arquitectonica at times appeared more concerned with making the arena look good rather than making it functional. Imported paneling was used when domestic ones would have been cheaper. Custom-designed suite doors were missing a key component: a working lock.

And Laurinda Spear, one of the firm’s renown principals, insisted on using seat-cover fabric that the manufacturer warned was not fit for a bustling arena, according to the complaint.

“Within days of the opening of the Arena, the seats began to look weathered and unclean, a condition that only worsened with time,” the suit says. “After little more than one year of use, the seat fabric condition had become deplorable.” Replacing it cost about $800,000.

The Heat paid to build the arena on county-owned land, in exchange for an annual operating subsidy and profit-sharing agreement with Miami-Dade that was rewritten earlier this year.

The arena operator began fighting Arquitectonica shortly after the facility opened. But the protracted dispute has taken years because Basketball Properties had to go through the firm’s insurer, Reliance Insurance of Pennsylvania. Arquitectonica has argued the statute of limitations in the case has expired; the arena operator contends an agreement Arquitectonica entered into during an early arbitration action has kept the case alive.

In a series of decisions since 2010, a Pennsylvania court has ruled that Reliance, Arquitectonica’s insurer, was on the hook for $8.3 million. But so far the insurer, which is in liquidation, has paid only $3.3 million. Basketball Properties wants Arquitectonica to pay the $5 million difference — plus more than $3 million in attorneys’ fees.

However, if the Miami-Dade court were to rule that the Pennsylvania decisions against Reliance are not binding on Arquitectonica, then Basketball Properties wants to go after the firm for what the operator says is the full amount of its damages: more than $17 million."

Read more here:


Anonymous said...

Wait for the lawsuits if a hurricane hits. Lawyers will try to sue every window manufacturer, roofing company, architect, developer and contractors insurance. All the insurance companies will be in liquidation and the lawyers will have nobody of substance to sue.
Stadiums need to be renovated every 10 years. Every time they renovate they risk having to sue for defective workmanship or materials.

Anonymous said...

I figure they'll sue the taxpayers. Wait, isn't that what we have now? The bond issue is a de facto settlement agreement between insiders and the politicians they control.

Anonymous said...

Since the Heat Arena got built, Arquitectonica has learned a lot about building sports arenas. The David Blechham soccer stadium on Biscyane Bay will be a positive sign for Miami's growth as an international tourist destination where people want the real thing.

Anonymous said...

I suspect owners of Arquitectonica designed condominiums are not delighted by this article. As they slowly ponder if the special assessments were due to age or bad design.

Anonymous said...

PT Barnum said it best.

Anonymous said...

Typical method of operation in the Miami construction industry this is how we wash our money, wash our money.

Anonymous said...

open secret Mickey uses operating losses both real and imagined to offset profits reducing his profit sharing based rent to zero for 13 of the 14 years in the contract

Now that profit sharing rent deal is done he is trying to re-capture for losses and expenses during that period. which means the team WOULD HAVE show profits in the last 14 years
Great way to shelter your profits from your "partners" no?