Contractors Suing Brookfield For $6M For Work At Downtown LA Buildings
Contractors have filed at least 13 complaints in Los Angeles County Superior Court concerning mechanic's liens on Downtown buildings owned currently or at the time of filing by a Brookfield entity.
Together, the contractors claim they are owed $6M by Brookfield or its entities for work performed. About half the claims relate to work completed at the 777 Tower at 777 South Figueroa St., while the others pertain to work at EY Plaza at 725 South Figueroa St., which was placed in receivership in May. In all cases, the complaints name entities controlled by Brookfield, Brookfield Property Partners or both.
The cases, all filed within the last year, add to the troubles that Brookfield has had at Downtown properties owned by its entity Brookfield DTLA Fund Office Trust Investor, which earlier this year defaulted on more than $784M in loans.
Brookfield was technically in default on the loan for 777 Tower, having failed to secure a rate cap, a hurdle that many office owners will face over the next year or so. However, The Real Deal reported in June that it was making payments and wasn't delinquent on the loan.
Brookfield declined to comment to Bisnow on the status of 777 Tower or the accumulation of mechanic's liens at some of its Downtown properties.
In some cases, tenants are included in the complaints against Brookfield. Interior construction services company Environmental Contracting Corp. says it is entitled to payment of an approximately $2.5M unpaid balance for work it did to build out offices for Saiful Bouquet Structural Engineering, plus interest that has accrued since the end of 2022.
“ECC is informed and believes and based thereon alleges that authorized representatives of the Property's ownership stated that the ownership lacked the funds necessary to pay ECC directly or pay Saiful Bouquet, so that Saiful Bouquet could, in turn, send funds to ECC to pay for the work, labor and materials provided to the Property,” the complaint says.
Saiful Bouquet is named along with Brookfield as a defendant in the complaint, which was filed on April 28. A representative for Saiful Bouquet declined to comment.
A similar complaint filed in June and previously reported by TRD involved a contractor that had performed work at the 777 Tower and said it was owed approximately $1.4M for work completed, plus interest.
Mechanic's liens are filed when a contractor is owed money for completed work, but sometimes owners have reasons for delaying payment to their contractors, including when the quality of the contractor’s work is in question.
Mechanic's lien cases relating to EY Plaza all have a stay on their case, as the property is in receivership.
An April Securities and Exchange Commission filing from the fund that owned EY Plaza, the 777 Tower, the in-receivership Gas Company Tower, the Wells Fargo Center North and South Towers, and the FIGat7th retail center acknowledged that mechanic's liens were piling up at EY Plaza and the 777 Tower but didn't disclose monetary information about them. Some liens were filed after that April disclosure. The spring SEC filing was one of the last before the fund voluntarily delisted its stock and stopped reporting details on the properties publicly.
A November 2022 filing by that Brookfield entity showed it had about $822M in debt maturing on Downtown LA properties before the end of 2023.
