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Developer, not contractor responsible for Raleigh project failure: Arbitrators

An arbitration panel has ruled that the property developer and not the construction contractor was responsible for repeated delays in a failed Raleigh project, where a concrete building shell remains two years after work halted, the News & Observer reports.

The arbitrators determined that the developer wasn’t justified in cancelling the contract for the Hillsborough Lofts project, which was to be a seven-story student apartment building.

A bank has moved to foreclose on the project, with a public auction scheduled for Sept. 22, when the site will be sold to the highest bidder.

Wright Construction is grateful these three arbitrators concluded what my client has known all along: This project failed because of the actions of the owner, not Wright or its subcontractors,” the contractor’s attorney Matthew Bouchard at Lewis & Roberts told the newspaper.

Neither Hillsborough Lofts LLC manager Cary Joshi nor the company’s attorney could be reached for comment, the News & Observer reported.

Hillsborough Lofts and St. Louis MO-based Wright Construction signed a contract in October 2014 for a 75-ft.-tall building with 10,000 sq. ft. of ground-level retail. A crane was erected over the site near the intersection of Hillsborough and Horne streets in June 2015, and it has remained there, shifting in the wind, ever since.

Hillsborough Lofts terminated the contract with Wright Construction in December 2015 and immediately began arbitration against the contractor.

While it ruled that Wright Construction was not to blame for delays on the project, the arbitration panel ruled against the construction firm’s claims that the developer should be liable for fraud, unfair and deceptive trade practices or defamation, the News & Observer reported.

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