Editor's note: An earlier version of this story incorrectly said Star America Fund LLC of Roslyn, New York, was a party in I-69 Development Partners LLC.
State officials threatened Wednesday to find a private developer in default of its contract for building a 21-mile section of the Interstate 69 extension in central Indiana after a major subcontractor stopped work over lack of payment.
The Indiana Finance Authority has issued a notice of non-performance to I-69 Development Partners LLC for the project upgrading the current Indiana 37 route between Bloomington and Martinsville.
The dispute comes after Crider & Crider Inc., the contractor responsible for the project's earth-moving operations, halted work this week.
The state finance authority and the Indiana Department of Transportation said the agencies were taking action to hold the developer accountable for than $2.3 million owed to Crider & Crider.
"The state expects contractors working on this project and all projects to be paid on time," Indiana Public Finance Director Dan Huge said in a written statement.
A message seeking comment from officials with I-69 Development Partners wasn't immediately returned Wednesday.
The Indiana Finance Authority selected I-69 Development Partners to build the $325 million Bloomington-to-Martinsville section, with the state paying $80 million up front and making annual payments of $21.8 million a year for 35 years, with possible adjustments for inflation.
Work started in 2014 and was originally slated for completion by the end of 2016. State officials have already pushed back the expected completion date until June 2017 before the new work stoppage.
Don Conard, superintendent with Crider & Crider, said the company stopped work last winter and in March over missed payment deadlines.
"All our equipment is lined up," Conard told The Bloomington Herald-Times. "None of it's running."
State Rep. Matt Pierce, D-Bloomington, said many people are frustrated with the traffic delays on Indiana 37 caused by I-69 construction and that he's not been able to get answers from state officials or the developer.
"People don't understand why they're driving through miles and miles of traffic barrels and seeing little, if anything, getting done," he said.
About 95 miles of the I-69 extension have opened since 2012 between Evansville and Bloomington through southwestern Indiana. The total cost of the I-69 extension is estimated at $3 billion, but the cost of the final leg from Martinsville to Interstate 465 has not been determined.