Big bash for Theater District savior | Struggling Rise Construction notches badly needed legal win | Hunt is on for a new CommonWealth editor - we have some names | Housing starts up in Boston, but is it real? |
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Rise and fall: Prominent Boston contractor rebuts charges that it engaged in an old-fashioned document dump amid a high-stakes legal battle
Even in the colorful, rough and tumble world of construction, it was quite the story.
Rise Construction Management, a prominent Boston contractor, was accused of hurling sensitive documents about a troubled development project into a dumpster and then hauling them away.
Now it turns out the tale may have been too good to be true.
A state judge has rejected developer DivcoWest’s request for a restraining order to prevent the destruction of documents by Rise related to its work on The Ellery, a 70-unit apartment building under construction in West Roxbury.
In an affidavit filed in state court, Jim Grossmann, a former Suffolk Construction exec who launched Rise more than a decade ago, argued there was no document dump.
Rather, a Rise superintendent inadvertently included some work documents as he hurled some personal items in a dumpster.
“Upon realizing what he had done, he … jumped into the dumpster himself and retrieved the permit cards and related materials,” Grossmann states in court documents.
In addition, all the records had been uploaded onto software program called Procore, which the developer and project owner, DivcoWest, had access to, attorneys for Rise have argued.
The judge, in a ruling last Thursday, also rejected developer DivcoWest’s request for a $2.5 million attachment on Rise’s bank account and on properties owned by Grossmann.
DivcoWest contends that Rise and Grossmann had failed to pay subcontractors working on the project all that they were owed.
But Rise counters that it was DivcoWest that was being the cheapskate, refusing to compensate the contractor for days lost to torrential rain and other weather related events, or to cover any change orders.
“All four motions were dismissed by the judge,” Grossmann told Contrarian Boston.
For Rise, the rulings last week were a modest but badly needed legal win.
Rise Construction Management burst onto the city’s construction scene a decade ago and grew rapidly. Soon after, Grossman helped launch Rise Together, a minority owned development firm headed and founded by Herby Duverné, on Boston magazine’s list of city’s 150 most influential Bostonians.
Rise has taken on nearly a dozen projects over the last several years.
But over the past two years, Rise has encountered some severe growing pains on a pair of construction jobs.
The contractor has struggled with cash flow issues on a residential project on Washington Street in Brighton and on The Ellery in West Roxbury. A number of subcontractors working on both projects have sued Rise, saying they are owned significant money for work they did.
The contractor’s growing challenges, in turn, have likely been exacerbated by a drying up of financing for new development projects, as interest rates have jumped and building costs have soared.
Rise has responded by trying to put its house in order. Last year the contractor let go a quarter of its staff, Grossmann said,
In a strategic shift, Rise also plans stick to work on projects on which the contractor is also the developer, such as through Rise Together.
That should help eliminated disputes over payments and cash flow - at least, that is, disputes between the contractor and developer.
“It’s just a better way to align,” Grossmann said, especially, he added, “when you do face challenges like a tight financing market.”
True rebound or dead cat bounce? While still anemic, construction of new housing ticks up a bit in Boston and across the state
It’s been a tough two years when it comes to the creation of desperately needed new housing.
The rise in interest rates, skittish lenders, and a slew of new regulatory mandates emanating from Boston City Hall have taken a toll, real estate executives say.
But are we now starting to see signs of a true turnaround?
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