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Conrad owners tussle with project architect: Lawsuit alleges firms are owed more than $850,000 for work on $100 million downtown luxury hotel

September 3, 2007

The cranes and contractors have been gone from the site of the Conrad Indianapolis for about 18 months.

But wrangling over the project continues in court.

The private owners of the $100 million project are quarreling with prominent local architects Browning Day Mullins Dierdorf and New York-based engineering firm Cosentini Associates over how much they're owed for their work.

Both Browning and Cosentini have filed liens: Browning says it is owed $764,000; Cosentini claims $91,000.

The owners say in a counterclaim that problems with the firms' design resulted in additional construction costs.

"As a result of the pervasive need to redesign, respecify and remediate portions of the Conrad Hotel project as a result of defective and deficient work, Circle Block has suffered, and continues to suffer, damages," the document claims.

The 23-story hotel at the corner of Washington and Illinois streets is owned by Circle Block Partners LLC, which is controlled by the Kite family and Tom McGowan, founders of Kite Realty Group Trust. The 241-room hotel opened in March 2006.

Mark J. Dinsmore, a partner at Barnes & Thornburg LLP who represents the hotel, said the problems mainly are a result of work performed by Cosentini, a division of Pasadena, Calif.-based Tetra Tech. Browning Day hired Cosentini as a subcontractor, working on mechanical, electrical and plumbing design for the Conrad project.

Dinsmore would not elaborate on what exactly was wrong with the work. He said the owners have paid the firm what they believe they are owed, based on the cost of fixing mistakes.

"These are all reasonable businesspeople involved," Dinsmore said. "I have hope and expectation that reasonable businesspeople will be able to come to a reasonable business decision."

The attorney for Cosentini, Bingham McHale LLP partner Gerard L. Gregerson, also is confident a settlement will be reached. The firms had to file a lawsuit at the end of 2006 to prevent their liens from expiring.

"The parties are trying to work together to amicably resolve it," Gregerson said. "The hotel's built and functioning. It's just a matter of trying to pare through the allegations and resolve them as quick as possible."

Browning Day's executive vice president, Greg Jacoby, declined to discuss the lawsuit and liens.

"We'd rather just handle it privately," he said.

The city also is named in the lawsuit because it owns the equivalent of an 8-percent equity stake in the project. But contract language protects the city from liability, said Barbara Lawrence, executive director of the Indianapolis Local Public Improvement Bond Bank.
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