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New York Wheel Developer Sues Designer for Threatening to Leave Project

By Nicholas Rizzi | June 22, 2017 1:08pm
 The New York Wheel is suing its designer and builder over threatening to pull out of the agreement to build the wheel.
The New York Wheel is suing its designer and builder over threatening to pull out of the agreement to build the wheel.
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New York Wheel

ST. GEORGE — Construction of the towering Ferris wheel set to dominate Staten Island's shoreline could grind to a halt as the builder threatens to leave the project, a lawsuit says.

Developers of the New York Wheel filed a lawsuit last month against designer and builder Mammoet-Starneth after it threatened to leave the $590 million project when the developer failed to pay the company for the work, the Staten Island Advance first reported.

The developers claim Mammoet-Starneth is responsible for numerous delays to the project, kept jacking up the price of its work and only threatened to leave to get more money, according to the suit.

"The developer has honored all of its contractual obligations and is committed to getting this unique project completed to the benefit of all stakeholders, public and private," Wheel spokeswoman Cristyne Nicholas said in a statement. 

"While it is not uncommon for contractors to engage in such tactics, we are confident that this issue will get satisfactorily resolved, through negotiation or through the court action that the developer has filed."

A spokesman for Mammoet-Starneth​, which is headquartered in the Netherlands, said the company "does not comment on matters pertaining to their customers or stakeholders."

In the suit, developer New York Wheel Owner LLC claims Mammoet-Starneth had "more than two years of self-inflicted delays and extortionate attempts to extract additional payments totaling more than 50 percent of the agreed contract price" of the project.

The builder originally agreed on $145 million to perform work on the project, but asked the developer for an extra $20 million for "delay damages," the suit says.

Because of the developer's failure to pay the extra costs, Mammoet-Starneth "formally suspended performance" and threatened to withdraw from the contract, the suit claims.

However, Wheel developers blame Mammoet-Starneth for the delays — either by not delivering the engineering drawings or failing to obtain Department of Buildings permits in time — and said it already had to kick in $16 million to finish some of the designer's work.

Despite the disagreement, the suit says Mammoet-Starneth is the only company with the knowledge to finish building the 630-foot wheel, which will be one of the tallest in the world. Court documents include letters from CEO Rich Marin and Borough President James Oddo outlining the potential impact on the redevelopment of the North Shore if the wheel doesn't rise.

"As the central tourist attraction of the development, there is no question that the loss of the Wheel would have disastrous consequences for the surrounding development," Oddo wrote in a letter earlier this month. 

"It would likely lead to the lost opportunity of hundreds of jobs, as well as having collateral consequences to the planned midtown ferry, and direct and indirect impacts on the borough."

The developer asks a judge in the suit to rule that it does not owe any payments for the delays or damages to compensate for breach of the agreement, as well as to stop Mammoet-Starneth from pulling out of the project.

Crews have been working on the Ferris wheel for nearly two years and already pushed back its first ride several times. It is now expected to open in April 2018.

Work has continued on the project despite the dispute with the contractor, a spokeswoman for the developer said.