Design firm sues developer over pay in Leland Hotel rehab

**Airforceguy** · October-26-22, 10:43 AM

Kraemer Design group is suing Micheal Higgins over the unpaid balance for its design work. I wonder if this lawsuit will light a fire under the developer to get this project started or to drop it.

"We are moving ahead on the project, on the financing," Higgins said. "It’s not going as fast as we had hoped, but we still are in that process."A spokesperson for the Michigan State Housing Development Authority, known as MSHDA, wouldn't discuss any specifics Monday about the Leland project, saying in a statement only that some developments "require extra effort to get over the finish line."
"MSHDA has been and continues to be committed to engaging with the developer and the city to find the best approach for this project," said spokesperson Katie Bach.
Higgins said he was surprised to see Kraemer Design go to court right away for the money. The firm also filed a lien on the property.

Design firm sues Detroit developer over pay in $125M Leland rehab [[freep.com)

**Airforceguy** · October-26-22, 10:55 AM

Also, in a related development, Michael Higgins is suing a contractor that filed for bankruptcy claiming that the filing is delaying him from securing financing for the long planned mixed-used project at E. Jefferson and Van Dyke in the city's West Village neighborhood.

Lawsuit claims construction company's bankruptcy delays West Village redevelopment

In a lawsuit filed Friday in U.S. Eastern District of Michigan Bankruptcy Court, an affiliate of developer Michael Higgins [[more on another case in a hot minute) claims a construction lien that the now defunct Bloomfield Hills-based T.H. Marsh Construction Co. filed this summer seeking $267,000 for alleged unpaid work is hindering financing on his mixed-use redevelopment proposal for the northwest corner of Jefferson Avenue and Van Dyke Street.

An attorney for T.H. Marsh in its bankruptcy case did not respond to a message seeking comment Tuesday.

Lawsuit claims construction company's bankruptcy delays West Village redevelopment

**401don** · October-26-22, 12:22 PM

Surprised Kraemer even took the contract from Higgins. Should have known to get money up front and on pay plan as work went along.

**royce** · October-26-22, 02:18 PM

I got a good laugh when the article wrote that Higgins was surprised to see Kraemer Design go to court right away for the money. What ,they weren't supposed to do that? Also, how do you sue a company that's filing for
bankruptcy? That's my two cents.

**Richard** · October-26-22, 02:53 PM

He should of have never messed with MSHDA the other guy has priority over any funds sent out and what does or does not get done.Should have just went straight to HUD.

**wolverine** · October-26-22, 03:45 PM

Originally Posted by 401don

Surprised Kraemer even took the contract from Higgins. Should have known to get money up front and on pay plan as work went along.

Not how it usually works. It could make things worse. In most cases money up front is very risky for the architect to ask for. It’s far less risk to ask for nothing up front and pay as they go. So a payment for schematic design, then design development, then construction drawings and finally construction management. So maybe 4 payments as the project progresses. The reason you don’t take money up front is because the client will then think you can provide nearly unlimited labor because the expectation is they already paid, regardless of the contract scope.

**401don** · October-26-22, 05:05 PM

Originally Posted by wolverine

Not how it usually works. It could make things worse. In most cases money up front is very risky for the architect to ask for. It’s far less risk to ask for nothing up front and pay as they go. So a payment for schematic design, then design development, then construction drawings and finally construction management. So maybe 4 payments as the project progresses. The reason you don’t take money up front is because the client will then think you can provide nearly unlimited labor because the expectation is they already paid, regardless of the contract scope.

Didn't know that - and I'm the Costanza of architects.

**Gistok** · October-26-22, 05:34 PM

I love the Leland House Building. It was designed by the famed Chicago theatre designing firm 'Rapp & Rapp' that designed the nearby Michigan Building and former Michigan Theatre.

Other famous Rapp & Rapp designs include the famous Chicago Theatre. Their most famous NYC building was the 33 story Paramount Building [and former Paramount Theatre, which was gutted for office space in the early 1960s], which is at 1501 Broadway on Times Square.

The similar design theme all of these buildings had in common was what was known back in the 1920s as "Rapp & Rapp Versailles".

**hybridy** · October-27-22, 10:52 AM

Originally Posted by 401don

Surprised Kraemer even took the contract from Higgins. Should have known to get money up front and on pay plan as work went along.

Architects have been treated like a commodity for a long time. It’s been a race to the bottom with fees and working without a signed contract is common. Suing Higgins was likely a last resort or preemptive strike, as chasing new work with pending litigation or threat thereof is a big turn off for future clients.

**Richard** · October-27-22, 11:08 AM

Not on that scale but everytime I have used an architect payment was due on delivery of the plans.

I think in this case because you have to have the numbers in order to get financing,they floated the architect services,but they did do it knowing full well the risks involved.

In the contracting world it is not uncommon to place a lien on the property before commencing work and then provide the customer with a release of lien when the finial payment is made.

I agree with the preemptive strike,they are just laying the legal grounds just in case it all goes south with the financing,one phone call and it goes away.