Claims of unpaid bills mount at hospital redevelopment

Multiple contractors on the Naval Hospital redevelopment in North Charleston claim they have not been fully paid, and are owed nearly $800,000 collectively. Charleston County’s agreement to lease space in the building helped developers get financing, but the county has no estimate for when its new office might be ready.

Contractors’ allegations of unpaid bills continue to mount at the Naval Hospital redevelopment project in North Charleston, with seven companies or individuals claiming they are collectively owed nearly $800,000.

“It’s very unsettling,” said lawyer Tommy Goldstein, who filed a $40,283 legal claim for B&F Construction on July 27. “When you go down to the (county offices) and see five other liens and two lawsuits, you say ‘uh-oh.’ ”

Charleston County officials say work at the former hospital at Rivers and McMillan avenues is progressing. The county plans to consolidate some government offices there.

A visit to the site Tuesday and Wednesday during the early and mid-afternoon found just six cars parked in the hospital’s expansive lot each time. A security guard at the gated site said no one inside would meet with a reporter, and directed inquiries to the developer in Utah.

The 10-story building is the tallest in North Charleston and is privately owned by a company called Chicora Life Center, but its purchase and redevelopment were made possible by Charleston County’s agreement more than a year ago to lease about a quarter of the building’s space for nearly $1.2 million yearly.

“The borrower brought incredible value to this property by securing a long-term lease with the county of Charleston,” said Jeffery Weingart, senior vice president for UC Funds, when that company announced in September that it was loaning $10.9 million to the developers.

That loan allowed the developers to complete their $5 million purchase of the building from the city of North Charleston. The UC Funds statement last fall said that “over $4.5 million of the loan has been allocated to property improvements,” including an upgrade of the heating and air conditioning.

“The owner is still working on the project,” Charleston County Administrator Keith Bustraan said this week. “The next big push is a permanent HVAC solution.”

The county had hoped to move health care services, such as drug and alcohol treatment, into the building more than seven months ago. There is currently no estimate as to when the space will be ready, and the county will not owe money for the lease until staff can occupy the building.

“When they are ready, we’ll be ready, and that’s that,” County Council Chairman Elliott Summey said in an interview two weeks ago.

To date, seven contractor claims of non-payment have been filed, either as lawsuits against the developer or “mechanic’s” liens against the hospital property, or both. They total $799,582.

Developer Douglas Durbano, a Utah lawyer and principal in Chicora Life Center, said the contractors’ claims don’t amount to anything controversial.

“In proportion and relationship to the size and scope of this project, the lien claims and disputed amounts seem small in nature and not outside the range of normalcy,” Durbano wrote in an email. “The fact that the law allows a claim to be easily filed does not endow that claim with any legitimacy, but just the opposite.”

The development company counter-sued in one case, involving real estate firm Lee & Associates. That case went to arbitration, which was unsuccessful, and the case has not been concluded. Durbano said Chicora Life Center also disputes the claim of Matthew Moore, whose June lawsuit said the company failed to pay him $11,000 owed for engineering services.

Durbano is the only known majority investor in the hospital redevelopment. Donald Trump Jr., son of the real estate tycoon running for president, is a minority investor.

Jeremy Blackburn, a Mount Pleasant resident and longtime business associate of Durbano who has done business with North Charleston Mayor Keith Summey — building a rental property for Summey and selling North Charleston miniature wind turbines for the roof of City Hall — was initially the project’s local representative.

Blackburn was also CEO of Titan Atlas Global, a company in North Charleston, which shut down last year leaving a trail of debts and litigation, and he was involved in a failed development of affordable housing in Liberty Hill, which ended in foreclosure. Blackburn’s LinkedIn profile indicates he hasn’t been the owner’s representative since April.

“The project’s very mysterious,” Goldstein said. “I drove over there to see when my client might get paid, and the gate was locked.”

Reach David Slade at 937-5552.