One Chatham Center contractor walks off the job
Core Realty, a Philadelphia developer that struggled to pay contractors working on the redevelopment of the former Kaufmann’s/Macy’s department store in Downtown, now faces a similar issue at a nearby building.
MOC Inc., the company that handled operations and maintenance work at One Chatham Center, walked off the job Saturday, saying it had not been paid by Core, the building owner.
Connie Stobert, MOC president and CEO, said Thursday that Core owes her small firm about $242,000 for work dating back nearly four months.
“It just got to the point where they owed us so much money — we just had to stop the bleeding,” she said.
In vacating the Uptown building, MOC was forced to lay off five employees who are members of Local 95 of the International Union of Operating Engineers, including two who were just hired Jan. 1.
“It’s the most horrible thing ever,” Ms. Stobert said.
The union distributed flyers outside of One Chatham Center this week asking for support in urging Core to pay its bills.
“During this financial dispute, our contractor has continued to pay the wages and benefits of our members. However, due to a lack of payment from Core Realty, our contractor was left with no choice but to vacate the site on 2/27/2021 and was forced to lay off our engineers,” the flyer said.
Core President Michael Samschick did not dispute owing the company money. But he said he had never been more than 60 to 90 days late in paying MOC, and he maintained that Core had been making payments consistently up until Feb. 16.
Mr. Samschick said he and MOC had agreed that if the company didn’t get a payment by a certain date, it would stop working at the site. He vowed to pay MOC the money it’s owed.
“We are not avoiding them. We’re not looking to not pay them,” Mr. Samschick said.
The One Chatham situation isn’t the first time Core has run into problems with contractors.
Over several years, it faced dozens of liens totaling millions of dollars from contractors who said they weren’t paid for work done on the redevelopment of the former Kaufmann’s/Macy’s building.
Virtually all of those have since been satisfied or settled.
Core purchased the Downtown landmark in 2015 with plans to convert it into 311 apartments, two floors of retail and a hotel.
But it struggled to bring much of that project to fruition. Last year, the team of Philadelphiabased Lubert Adler Partners LP and Adventurous Journeys Capital
Partners of Chicago took control over the project with plans to invest $40 million in it.
Core purchased the One Chatham Center office building in 2017 for $8 million with plans to convert it to apartments. Core bought the property from HSBC Bank USA, which paid $2,321 for it at a sheriff’s sale in 2015.
The sale affected only the first and the third through ninth floors of the 20-story building. (The Marriott City Center Hotel occupies the rest of the building; it was not affected by the redevelopment plans.)
MOC, however, provided operations and maintenance to the entire complex, which includes the
hotel and Chatham Tower Condominiums. That included maintaining boilers, chillers, and heating, ventilation and air conditioning equipment, Ms. Stobert said.
Even though she said the company was not being paid, it stayed on the job during the cold snap last month to make sure pipes didn’t freeze or break. It had continued to pay the employees working there even though it wasn’t getting reimbursed by Core.
Fearful it would never see the money, MOC finally decided to pull the plug last weekend because it couldn’t afford to go longer without being paid, Ms. Stobert said.
“We can’t keep paying these guys knowing we’re never going to get reimbursed for it,” she said.
Mr. Samschick said he has hired another union firm to take over the work. Core also is planning to invest more than $600,000 to replace antiquated equipment that required laborintensive maintenance.
“The whole reason they were there was because the equipment was so antiquated. It was a labor-intensive nightmare,” Mr. Samschick said.
Downtown-based MOC — which stands for Mechanical Operations and Consulting — has nearly 60 employees overall, most of whom are members of Local 95.
The firm has contracts at a number of locations, including the Carnegie Science Center, the Andy Warhol Museum, and Downtown’s PPG Place complex and EQT building.