Miami Beach Sued for $70M by Contractor on Unfinished Convention Center

The construction manager for the massive Miami Beach Convention Center redevelopment claims the city owes over $70 million for extra work resulting from the city’s many designs changes.

Clark Construction Group LLC was hired as construction manager in 2015 agreement for the $515 million renovation and expansion project. It includes 500,000 square feet of exhibit walls, meeting rooms and support space plus a 60,000-square-foot ballroom, rooftop parking, and landscaping and road work.

In a lawsuit filed Wednesday, the Bethesda, Maryland-based builder claimed the city issued multiple changes to design drawings and agreed to some of the extra costs but declined many others. The city also declined to grant Clark all the extra time it needed to complete the work, leaving the contractor to either push to finish in time for major events or work around them.

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Clark and its subcontractors “incurred significantly increased construction costs and delays as the city made hundreds of design changes throughout the project,” company attorney Etan Mark said.

Most of the $70 million allegedly due is for payments to subcontractors, said Mark, managing principal at Mark Migdal & Hayden in Miami. Virginia-based Banker Steel Co. already sued Clark.

The city maintains Clark is at fault for completion delays and the city is entitled to damages.

“I find it shocking, given that Clark Construction has delayed this project for nearly 1.5 years and has yet to finish, that they have the gall to file a lawsuit against us,” City Manager Jimmy Morales said by email. “Frankly, the city is the one entitled to damages, not Clark.”

Morales added he won’t litigate the issue “through the newspapers” and looks to its “day in court.”

The city is hosting an NFL showcase in conjunction with Sunday’s Super Bowl LIV and hosted Art Basel last December at the center at 1901 Convention Center Drive.

It held these and other events without a certificate of occupancy and generated revenue without paying Clark as it continues to work toward completion, Mark said.

Morales didn’t address whether the center has a certificate of occupancy.

The lawsuit also named the city’s representative, Hill International Inc., which was hired to monitor and manage the project, claiming it wrongly advised the city to reject proposed change orders. The city followed Hill’s recommendations, the suit claims.

Hill International had no comment by deadline.

The city, which was responsible for the design, hired Clark when design documents were 65% complete. From those plans, Clark generated the $515.5 million guaranteed maximum price and June 30, 2018, substantial completion date, according to the complaint.

When the city provided the finished design, it wasn’t based on what it already had given Clark or the $515 million agreed price, the company maintains. The city allegedly kept revising designs, essentially increasing project costs.

The city agreed in January 2017 to increase the guaranteed maximum price by nearly $40 million and push back the completion deadline to Aug. 8, 2018. The city allotted a 15-day extension to account for Hurricane Irma but six months later didn’t allow for Clark’s 39 other extension requests.

The city piled on more design changes, including eight issued after the completion deadline, according to the complaint. One required the addition of a connection such as an escalator or elevator between the ballroom and exhibit space.

When Clark requested clarifications, the city responded with more changes, the complaint said.

The city issued a notice of default to Clark and threatened to levy $15,000 a day in liquidated damages over deadline lapses, the complaint said.

“It’s obviously Clark’s position that that’s the city’s fault, not Clark’s fault,” Mark said. “Clark is continuing to work there because they want to finish the job and want to finish what it is they promised to do.”