The developer of Comcast Corp.’s 60-story technology tower in Center City has sued its general contractor on the project for $103.4 million, accusing it of shirking responsibility for cost overruns and of causing a two-year delay in the opening of the Four Seasons hotel at the top of the building.
The plaintiff, a unit of Liberty Property Trust, filed the suit against L.F. Driscoll Co. in Philadelphia Common Pleas Court on Feb. 4, the same day that Liberty was formally acquired by industrial-property giant Prologis Inc.
“Driscoll had promised more than it could deliver,” lawyers for Liberty wrote in their complaint, which accuses the unit of the New York-based Structure Tone Organization of four counts of breach of contract. “Driscoll had quite simply lost control of the project.”
In a statement, Driscoll said that the “challenges, delays and cost overruns” on the project were the fault of design revisions completed at Liberty’s behest and that it would “fight vigorously for what we believe is right.”
That disclosure, paired with an announcement later in 2018 that it was writing down the value of its sprawling development project on the Camden waterfront by $26 million, preceded Liberty’s move to end its office-development business in favor of an exclusive focus on industrial real estate.
In October 2019, its plan to be acquired by San Francisco-based Prologis was announced, marking the end of what was once perhaps Philadelphia’s highest-profile developer of office buildings.
Driscoll had been Liberty’s partner during the developer’s skyline-defining tenure in the city, collaborating on such projects as the Comcast Center, headquarters to the Philadelphia-based entertainment and technology giant.
So it was natural for Liberty to tap Driscoll to help it build the Comcast Technology Center at the inception of the $1.1 billion proposal, according to the lawsuit.
But between the two Comcast projects, once-locally operated Driscoll was acquired by Structure Tone, a “change of ownership [that] proved to have a profound impact on the progress of the project and the relationship between Driscoll and Liberty,” Liberty’s lawyers wrote in their complaint.
The first warning signs appeared in the summer of 2017, about three years after the project had broken ground, when Driscoll’s spending reports began to be filed late. The reports were part of Driscoll’s deals with Liberty that capped the builder’s “guaranteed maximum price” for the job at around $715 million.
That December, after months of assurances that all cost targets and deadlines were being met, a Driscoll executive “placed a panicked phone call” to Liberty about a previously unknown cost overrun of $21.5 million on the Four Seasons hotel portion of the project on the building’s top 12 floors, according to the suit.
When construction went $67 million over the guaranteed maximum four months later, Liberty was forced to make its public disclosure, even as Driscoll rebuffed the developer’s requests for “details and substantiation” of the overruns, according to the complaint.
In the meantime, serious delays began to materialize, setting back the opening of the 219-guest-room hotel.
For example, Driscoll removed the tower crane stationed at the top of the building nearly a year and a half behind schedule, which kept the spa and “Sky Lobby” on its hotel’s highest floors from being completed on time, according to the the lawsuit.
Another holdup was caused by problems with glass within the elevator shaft, which delayed until early June 2019 the issuance of elevator permits that the hotel needed before it could open, according to the complaint.
The Four Seasons began formal operations that August after a “soft launch” earlier in the summer.
Throughout its difficulties with Driscoll, Liberty continued paying the subcontractors working for the construction firm, even though those costs were Driscoll’s responsibility under its contracts with the developer, according to the lawsuit.
Liberty seeks $53.1 million it has paid to subcontractors as damages. And $27 million more is sought in connection with lien claims filed against the project by subcontractors, for which Liberty claims Driscoll bears responsibility,