CRAIN'S CHICAGO BUSINESS

Vol. 21 No. 28
By Jeff Borden

Hubbard Street Dance Chicago and the contractors that renovated its Near West Side facility last year are doing the litigation dance in Cook County Circuit Court.

Palatine-based Majestik Contracting Services Inc., the general contractor on the project, has slapped a lien on the property at 1147 W. Jackson Blvd., claiming the not-for-profit arts group still owes almost $635,000 after paying more than $1.1 million. Several subcontractors also have filed liens against the property. Hubbard Street argues it is being overcharged for work it believed was part of the original bid. The arts group has offered to settle, but Majestik rejected the offer as too low.

Structural defects found

"It's hurting us a lot and it's hurting our future, too, because some of the subcontractors don't want to work with us anymore since they haven't been paid," says Terry Sullivan, Majestik's general superintendent.

Mr. Sullivan says the renovation of the 40,000-square-foot building into a recital hall, classrooms and offices required more work than originally estimated because many walls were found to be structurally unsound.

But Hubbard Street attorney Donald 1. Resnick, a partner at Chicago law firm Jenner & Block, says the issue is more complicated.

"There were numerous items for substantial dollars we felt were part of the original contract," he says. "There were other items that were incurred because of faulty construction."

Meantime, the smaller subcontractors hired by Majestik are being buffeted by the legal wrangling- Addison-based Storage Services Inc., for example, is owed just over $8,000 for the cost and installation of lockers.

Caught in the middle

"These guys work on small margins," says Arthur Raphael, a partner at Chicago law firm Teller, Levit & Silvertrust, which represents Storage Services.

"Subcontractors get into situations where they get caught in the middle. A few jobs like that and you're out of business."

Hubbard Street officials stress that the dispute with the contractors won't affect the organization's financial status. The group expects to exceed its $6-million capital campaign this year.

"Our financial condition is very solid," says Sondra Berman Epstein, chairman of Hubbard Street's board.