City Springs 14 entrance/building

Individuals attending City Springs’ grand opening event May 7, 2018 exit the main entrance of City Hall.

Holder Construction Group, the company that built the city of Sandy Springs’ new City Springs complex, has sued the city over disagreements on payments for the work, and the city has filed a counterclaim.

The city announced the countersuit in a Sept. 18 news release. It claims Holder, which filed its lawsuit in August in Fulton County Superior Court, should be denied payments from the city’s public facilities authority, which is the city council acting on behalf of City Springs, until all work is done.

In its counterclaim, the authority is seeking damages from Holder for breach of contract, negligent construction and fraud.

Holder was chosen in June 2015 as construction manager at risk to build City Springs, a $229.2 million project that includes the Sandy Springs Performing Arts Center, City Green, an underground parking garage and municipal offices. Holder claims the city failed to pay bills due to the company between September 2018 and January 2019.

“The (authority) is concerned at the amount of nonconforming work discovered within the project,” Sandy Springs City Attorney Dan Lee said in a news release. “Aside from its right to retain adequate funding to correct faulty work, the (authority) is obligated to ensure that the citizens of Sandy Springs receive the quality work Holder was contracted to provide. It’s the (authority’s) fiduciary responsibility to do so.”

The authority states its contract with Holder allows it to retain sums adequate to assure the project is completed according to contract specifications. In its counterclaim, the authority claims Holder is in breach of contract for defective and nonconforming work. The counterclaim details several examples, requesting recovery of repair costs, costs of additional fees for consultants, inspectors, architects and engineers and extended maintenance costs.

“While these deficiencies represent only 1% of the overall project, we want 100 percent of the work done correctly,” Mayor Rusty Paul, who serves as the authority’s chair, said in a news release. “The City Springs project remains a tremendous success for Sandy Springs; however, after Holder filed a baseless lawsuit while discussions and negotiations were ongoing, the (authority) is forced to seek recovery on behalf of Sandy Springs’ citizens by means of a counterclaim.”

In an interview, Dave O’Haren, Holder’s chief financial officer, said the company disagrees with the city on several aspects of the issue.

“There are many parts of their counterclaim we disagree with, (and) in particular about fraud, we strongly disagree with (it),” he said. “There are other technical aspects of the suite we disagree with that we’ve been trying to work through the past several months that we hit a road block on.”

O’Haren, who sat in on meetings with the city over the disagreements the two sides had on the project, said the city calling some of those encounters “negotiations” is incorrect.

“We were not technically negotiating,” he said. “We had requested payment of past-due invoices and the meetings we were having were engineers explaining aspects of the (development) that included the cistern and the low-voltage cabling. They have not offered us any money, and Dan Lee told me to my face they were not paying us, so this notion they were negotiating is not accurate.”

In conjunction with the counterclaim, the city also filed suit against Rosser International, City Springs’ architectural firm, alleging breach of contract and professional negligence in architectural services provided by not sufficiently supervising these activities. An email sent to a Rosser spokesperson seeking comment was not immediately returned.

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