Orem's Midtown debt sparks lawsuit

In fact, the $100 million-plus project has racked up enough IOUs that more than a dozen companies recently sued Midtown Joint Venture LC in 4th District Court for millions of dollars in unpaid labor.

"(The suit) has been percolating for six to eight months while the contractors haven't been paid," said attorney Robert Babcock, who represents head contractor Big-D Construction Corp. and the joint venture of Big-D Construction Corp./Ellsworth Paulsen Construction Co. plus numerous other subcontractors including SME Steel Contractors Inc., BMC West Corp., T S Electric Inc. and Geneva Rock Products Inc.

"We were hoping the developer could work out his issues, get the financing he needs to finish the jobs," Babcock said. "The contractors are still hopeful that will happen but they're running out of patience."

The company is owed no less than $16 million, plus interest, according to the lawsuit.

Plans were drawn up beginning in 2002 and excavation at 320 S. State took place in September 2004. But by January 2005, financial woes halted the project and the giant hole sat empty.

Construction didn't begin again until April 2005, with a few changes in contractors and financing sources.

Steel beams slowly rose out of the hole and the project began taking shape until this February, when construction stopped again due to a finance flop.

"(The crews) are heartsick, they're anguished," said defense attorney Mark Poulsen, who represents Western States Mechanical Inc., JPM Inc. and Houghton Plaster Inc. "They're wringing their hands about how they're going to be paid. They are owed a staggering amount of money."

Poulsen estimated his clients are owed between $4 million to $6 million, and would be hesitant to even approach the project again at this point.

Midtown's south tower is nearly completed and even has a few tenants — also named as defendants in the lawsuit due to tax liens. The north tower is more skeletal and the west tower is still just a plan.

"There's too much money in the project for it not to be finished at this point," Larry Myler, project owner, told the Deseret News when construction stopped. "It will be finished eventually. My main goals at this point are to take care of the contractors, take care of the buyers and continue working with our bank. We will get through this market together. We will make it work together."

Myler was out of the country Tuesday and could not be reached for comment. Numerous calls to other Midtown representatives were not immediately returned.

Babcock said the suit is an attempt to "turn up the heat," and see if banks or Myler can find more financing to get the project finished.

The suit also attempts to establish that when the money eventually comes in, the contractors are first in line to get paid back, with the banks in second place, although that's not what the banks want, Babcock said.

"It doesn't do many people much good to have an unfinished project," he said. "Nobody gets paid back while it sits."

And if a secured source of funding were to arrive in a few months?

"We'd be happy to dismiss, get paid and go finish the job," Babcock said.

E-mail: sisraelsen@desnews.com

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