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Downtown Hilton construction halted by contractor in $317,273 dispute
A skeleton awaits the G-20
Tuesday, June 23, 2009

For the second time in the last year, work has stopped on a $25 million renovation project at the Hilton Pittsburgh, leaving an unfinished steel skeleton sitting at the city's doorstep less than three months before the start of the G-20 economic summit.

Contractor P.J. Dick has pulled its workers from the site, claiming that it is owed $317,273 under two contracts relating to the construction of an addition to the hotel, the city's largest with more than 700 rooms.

The company filed a mechanics lien Friday in Allegheny County Common Pleas Court, seeking payment from Hilton owner Shubh Hotels Pittsburgh LLC. In the complaint, it said its last day at the site was May 15.

"We are not working because we haven't been paid," said Dale R. Lostetter, P.J. Dick vice president of contract administration. "We'll be back on the job when we get paid."

The work stoppage is the latest setback for a project that has been beset by financial problems since its start more than two years ago, dragging out the renovations beyond anyone's expectations. At one time, officials had hoped to finish the work in about a year.

P.J. Dick also pulled its workers from the Hilton job last year after filing a mechanics lien in May for the nonpayment of $575,539. That lien was satisfied in full in November, and work resumed.

The contractor at the time was among more than a dozen companies that filed mechanics liens or claims against Shubh Hotels over the last 18 months for hundreds of thousands of dollars in nonpayments relating to work at the Hilton. Since then, nearly all the claims have been settled. In two cases, default judgments, one for $22,280 and another for $12,346, were entered against Shubh, according to court records.

In addition, agencies representing four different unions have filed complaints against Shubh claiming that it has failed to make more than $34,000 in various pension, fringe benefit, annuity and dues-related payments in March and April. The Hilton had faced a similar problem last July.

At one point, the hotel also faced possible court action and a shutdown because it owed more than $440,000 in delinquent hotel-motel taxes to Allegheny County. It paid about $400,000 in back taxes in February and worked out a payment plan for the rest.

Since then, the Hilton has stayed current on hotel-motel taxes and the payment plan, county Treasurer John Weinstein said.

"To their credit, they've done a good job working with us," Mr. Weinstein said.

In the past, Shubh has blamed the problems on trouble in raising financing. It also said the renovations proved to be more costly and time-consuming than anticipated. In October, it secured new financing that was to get the work back on track.

Hilton General Manager Jon Shisler said yesterday he could not comment on the work stoppage. He referred questions to Shubh Chief Executive Officer Atul Bisaria, who could not be reached for comment, and Chief Operating Officer Harris Mathis, who did not return messages left on his voice mail. Shubh Hotels Pittsburgh is part of Shubh Hotels LLC, a privately owned real estate investment company based on Boca Raton, Fla.

One phase of the renovations involved interior work that included new carpeting, ceilings, painting and other improvements to guest rooms and corridors, virtually all of which has been completed.

The addition, meanwhile, was to have included a swimming pool, health club, expanded banquet facilities and other work. But so far, very little appears to have been done other than the erection of some of the structural steel.

Joanna Doven, spokeswoman for Mayor Luke Ravenstahl, said the city had not been notified that work had stopped on the exterior renovations and would look into it.

If work has in fact been halted, city Bureau of Building Inspection officials would meet with the contractor and the hotel with the "ultimate goal" of getting the renovations started again, she said. If that does not happen, the building permit could be revoked, she said.

Ms. Doven added that the city is trying to look its best for the G-20 summit, which will bring the world's top leaders and thousands of other dignitaries and journalists to Pittsburgh Sept. 24-25. Given its prominent location at the entrance to the Golden Triangle and Point State Park, the Hilton is an important part of that, she said.

"We'll certainly figure out what's going on and try to remedy the situation as fast as possible," she said.

Craig Davis, vice president of sales and marketing for VisitPittsburgh, which is coordinating G-20 arrangements, said he did not believe the half-completed exterior renovations would affect the summit itself but could leave "some individual guests wishing the hotel wasn't under construction."

"From the overall perspective, I don't believe [the stoppage] will dampen the success of the G-20, but I do hope they will find a way to settle their differences and have it completed in time because it would make for a better visitor experience," he said.

On the Priceline.com Web site, guests who stayed at the Hilton gave it mixed reviews, with some complaining about the construction and traffic concerns in front of the hotel. Some liked the renovated rooms; others said they were too small.

Mark Belko can be reached at mbelko@post-gazette.com or 412-263-1262.
First published on June 23, 2009 at 12:00 am