Cameron Welch, a member of the law firm Cole Schotz, in the litigation and construction services departments, is not involved in the Marriott Edition development. However, having years of experience in construction matters, he tells GlobeSt.com that in general, a change of ownership interests even with a project underway is often motivated by a change in business strategy of one of the partners pursuing a different direction unrelated to the project at hand.

He notes as that at the closing of the ownership sale, Witkoff and Winthrop plan to sign a development services agreement to finish construction, suggesting this was not a contentious parting of ways. “It depends on the terms of the agreement, but in my experience fewer partners with controlling ownership interests can streamline the process,” says Welch. Thus, he opined this latest development should not be expected to delay the construction schedule.

Tim Hegarty, a partner at Zetlin & De Chiara, works in the construction law practice, and also is not representing any parties in the transaction. He tells GlobeSt.com that construction partnership buyouts are “definitely not uncommon, certainly not rare.”

The original owners purchased the property for development six years ago, but Hegarty says building such a development in the city takes time. Especially work with the Metropolitan Transit Authority, neighboring properties and licensing agreements can cause delays.

Hegarty says certain issues can be squared away to help ensure construction continues in a seamless way when there is a change in ownership.

He highlights a few points that developers would need to review:

(1) Check into the project's financing with the transfer of ownership.

(2) Make sure design and consultant contracts are properly assigned.

(3) Modify contracts to reflect the ownership changes.

(4) Change owner representatives.

(5) Ensure all warranties are transferable.

(6) Review any bonds and named obligees.

(7) Complete an accounting of the finances relevant to the design, construction and contract compensations.

(8) Create a clean demarcation and documentation of when the new ownership is assuming responsibility of payment of prospective design and construction-related expenses.

(9) Perform due diligence to ensure insurance is being maintained.

(10) Update all agreements with the insurance agency.

With the Marriott Edition partnership deal, Hegarty noted it's in the current owners' best interest to have the project built as quickly and expeditiously as possible as time is money. “Usually ownership issues are resolved prior to commencement of construction but once the wheels are going it is not in anyone's interests to cause delays,” he says.