Builder Claims SugarHouse Owes $14 Million

The Chicago-based owners of Sugarhouse Casino in Philadelphia, which opened in May 2016, recently were sued by Skanska USA Building for $14 million. Skanska claims Sugarhouse agreed to pay $123 million for work on an expansion but only has been paid $118. Also, the builder claims Sugarhouse made $8 million in unpaid changes.

Skanska USA Building Inc. recently sued Sugarhouse HSP Gaming LP in Common Pleas Court for $14 million over unpaid work at SugarHouse Casino in Philadelphia. The New Jersey-based American arm of the global Skanska construction and general contracting group, Skanska USA Building claims the Chicago-based owners of SugarHouse Casino agreed to pay $123 million for work on an expansion that opened in May 2016, more than doubling the size of the only state-licensed gambling complex in the city.

The expansion added several new restaurants, an event center, a poker room, hundreds of slots and dozens of table games and a 7-story parking garage. The project also resulted in 500 new full-time jobs, bringing the workforce to 1,700.

Skanska said during construction SugarHouse made changes totaling $8 million that have not been paid for–including the kitchens used by Geno’s Steaks and Saxbys Coffee, waterproofing, ceilings, a large chandelier, armored car bay and more. Furthermore, Skanska said the casino deducted more than $1 million in claimed “liquidated damages” from its payments. The company only has been paid $118 million and filed the lawsuit for the balance. Mason Avrigian Jr., partner at Post & Schell PC in Philadelphia, representing Skanska, noted, “There are subcontractors with balances that are awaiting payment.”

Since last fall, a dozen subcontractors who worked on the SugarHouse expansion—drywall, electrical, steel, fencing, cabinetry, food service equipment, floor coverings and others–also have filed mechanics’ liens seeking payments totaling more than $10 million. Several are attempting to collect what they are owed from Skanska. Some builders also said they are owed money and are considering legal action.

SugarHouse spokesman Jack Horner said, “We can’t comment on pending litigation.” However, he noted, “It is the obligation of the general contractor to pay the subcontractors. Unfortunately, the general contractor has not done so, and the subcontractors have filed liens to protect their interests. It is important to SugarHouse that the subcontractors who built our expansion are compensated fairly and that our general contractor meets its obligations to them.”

Shawn R. Farrell, a partner at Cohen Seglias Pallas Greenhall & Furman in Philadelphia, representing several SugarHouse subcontractors, said, “This is not normal. I don’t see a resolution anytime soon.”

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