New York Wheel fires designer and builder for planned $580 million tourist attration

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new york wheel
Image from the Mammoet website showing the 2016 transportation of the four legs of the New York Wheel

The New York Wheel’s developer says has fired the project’s designer and builder, and expects to incur additional costs, which could potentially jeopardize the completion of the planned $580-million Staten Island tourist attraction.

NY Wheel fired Mammoet-Starneth LLC, its design build team, after the company failed “to meet multiple design and construction deadlines,” said Cristyne Nicholas, a NY Wheel spokeswoman.

New York Wheel alleges it has suffered more than $16 million in damages resulting from Mammoet’s delays, and $20 million in lost profits and other damages due to the designer’s breach of contract, SIlive.com reports.

“The developer is committed to completing the New York Wheel and recognizes its enormous importance to the revitalization of the North Shore of Staten Island. Due to the inability of Mammoet-Starneth LLC (‘Mammoet’), the design build team for the Wheel, to meet multiple design and construction deadlines, the developer has come to the conclusion that the best path forward for this project is to seek other means to take on the remaining aspects of that ‘turnkey’ arrangement,” Nicholas said.

“Accordingly, the developer has terminated Mammoet and withdrawn its request for injunctive relief from the court, which sought to require Mammoet to continue working on this project,” Nicholas said.

However, SILive reports that Mammoet-Starneth’s attorney Philip R. White said in a letter to U.S. District Court Judge Jesse M. Furman: “At this juncture, suffice it to say we disagree with the entire substance of the NYW (New York Wheel’s) proposed letter. NYW has been in default of its obligation under the DBA (Design Build Agreement) since January 2017 …”

The termination of the agreement with Mammoet-Starneth means higher costs and “court assistance” will be needed for the project’s completion, Nicholas said.

“In order to build the Wheel, the developer will need to seek out other qualified contractors,” Nicholas said. “This may require additional contractors, resources and even court assistance, resulting in added hardship for the developer.”

“The action that the developer is taking by terminating Mammoet is intended to move The Wheel to completion. The developer had to take action to address the situation forced upon it by the DBT (Design Build Team),” she added.

Mammoet-Starneth had suspended work on May 26 and threatened to terminate the contract, according to the New York Wheel’s civil complaint, filed on May 30 in Manhattan federal court. The company alleged New York Wheel Owner LLC had failed to make required payments, the complaint said.

After a 30-day mediation period, the NY Wheel terminated its contract with Mammoet.

In a letter to State District Court Judge Jesse M. Furman, NY Wheel attorney Randy M. Mastro said a 30-day mediation failed because the Design Built Team “refused to attend any mediation session. Then, yesterday, the DBT was informed in writing that we would be withdrawing our client’s preliminary injunction application.”

In terminating its agreement with Mammoet-Starneth, the NY Wheel wired the company $7.2 million.

“…that attempted payment cured nothing because it came with a demand for an accord and satisfaction aimed at conditioning acceptance of the money on a waiver of the disputed amounts in the outstanding payment applications,” said White in the letter.

White asked Furman in the letter for the case to proceed.

Said White: “What NYW’s actions also mean is that this case returns to what it always was — a garden variety construction dispute. Accordingly, we respectfully submit that the case should now proceed in the ordinary course with the next meaningful event being the DBT’s filing of a responsive pleading and/or motion on or before Aug. 11, 2017, at which point the DBT will detail its version of the events that have transpired since the inception of this project.”

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