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Hotel project: Who owes what, to who?

A newly-constructed, multi-million dollar luxury hotel in downtown Pagosa Springs has brought sales and Lodger’s Tax dollars to the town and likely profits to the hotel’s owners and the general contractors, yet county documents indicate, while some may be prospering with the project, others may be getting the shaft.

The hotel in question is the $10 million new addition to The Springs Resort complex and the paper trail begins May 26, when Pagosa Springs’ Flooring By Design, LLC filed a lien against Pagosa Springs Resort Company for $40,106.

Flooring By Design, LLC filed because the business had not been paid for its part in constructing the new facility which overlooks the San Juan River and lies adjacent to the original Springs Resort and Spa complex.

Soon thereafter, and as of Aug. 10, 10 other subcontractors filed liens, among them:

• Colorado Doorways Inc., Denver — $187,753.

• Concrete Connection of Pagosa Inc., Pagosa Springs — $113,754.

• DeClark Granite & Fabrication Inc., Pagosa Springs — $45,006.

• Elk Mountain Painting, LLC, Bayfield — $127,265.

• Houghton Specialty Finishes, Orem, Utah — $250,440.

• J & J Landscaping, Hesperus — $40,996.

• Timberline Framers Inc., Pagosa Springs — $94,569

• TL Roofing Inc., Durango — $78,972.

• Valley Sheet Metal, Durango — $78,132.

• Western States Fire Protection Company, Colorado Springs — $59,482.

According to lien documents filed with the county clerk’s office, Bill Whittington and The Springs Resort apparently operate under a number of business names: Springs Resort Ltd., Pagosa Springs Resort Company, Gulfstream Worldwide Ltd., Northwestern Investments Inc., Albuquerque Properties and 66 LLC.

All the subcontractors listed worked under contract with a general contractor, Okland Construction.

According to Rob Fisher, controller for Okland’s Tempe, Ariz., and Durango offices, Bill Whittington and The Springs Resort have not paid Okland since January.

“The January draw was paid in February, but Whittington has made no payments since,” Fisher said.

With The Springs allegedly not having paid Okland, many of the subcontractors have also gone without pay since winter.

“There’s $3.5 million undisputed that we haven’t been paid for, “said Fisher. “Any outstanding issues with the construction don’t add up to $3.5 million.”

Fisher said although 10 subcontractors have filed liens, there are as many as 14 more who could exercise their right under the timetable provided by Colorado statute.

In response to questions regarding non-payment, Keely Whittington of The Springs Resort wrote, in a prepared statement, “We are aware of the liens that have been placed. We are presently in communication with Okland Construction, the general contractor. As we understand it, they have some differences with some of their subcontractors. Our contract with Okland is still in place and we have met all of our obligations to date. We are in hopes that Okland resolves its issues with their subcontractors in a timely manner.”

Bill Okland, president of Okland Construction, said the only “issue” his company has with the subcontractors is his inability to pay them due to the Springs Resort failing to pay Okland.

“There’s a fair amount outstanding and there’s obviously some points of disagreement between us and Bill Whittington. We hope those differences can be resolved expeditiously,” Okland said.

In regard to paying subcontractors, Okland said, “Everything that we have been paid that is designated for subcontractors has been downstreamed to them.”

County documents appear to support Okland’s claim.

On June 29, Flooring By Design, LLC released its lien.

Nevertheless, according to lien documents filed with the county clerk, the unpaid amount due to subcontractors totals $962,616.

When asked why Okland would not simply pay the subcontractors and then deal with Springs on its own time, Fisher said the amount due to the subcontractors was too large, particularly in light of the fact that 14 more subcontractors had every right to file liens of their own. That said, if all remaining subcontractors exercise their right, liens against The Springs Resort could broach more than $1 million.

Unfortunately, and as Keely Whittington pointed out, the money trail flows from the client — in this case The Springs — to the general contractor and then down to the subcontractors.

In a telephone interview Wednesday, Whittington added, “We are speaking almost daily with Okland. We have good communications with them and we have approved those pay requests that have come from Okland to-date.”

Thus, while The Springs and Okland haggle over the alleged $3.5 million, some of the subcontractors say they are getting squeezed and are struggling to pay bills of their own.

SUN staff contacted all lien claimants and of the three that responded by press time, none reported “issues” — aside from non-payment — or friction in their relationship with Okland.

Bob Watson of Elk Mountain Painting said, “We’ve always had a good relationship with Okland. We’ve been told The Springs is not paying them (Okland) so they aren’t paying us. I did what I contracted to do and I don’t see why I shouldn’t get paid. I haven’t seen a check since January and I could really use the money.”

Kathi DeClark, co-owner of DeClark Granite said, “We felt very good about our work and working with Okland and never anticipated we would not get paid.”

Jerry Ladd, owner of Colorado Doorways Inc. added, “We’ve met all our obligations, there’s nothing left for us to do. It was expressed to me that perhaps the owner (Whittington) was not willing to utilize the financing that was in place to meet their obligations and instead was hoping for a reduction in project pricing.”

DeClark, like Watson and Ladd, reported no outstanding product quality, workmanship or warranty issues, nor any other problems that hadn’t been rectified either with Okland or The Springs.

When asked if such issues existed between The Springs and Okland, Whittington declined to comment.

According to Fisher, The Springs hotel expansion project began in June 2008 and was completed in May 2009, with final payment expected by the end of July.

james@pagosasun.com