Spooky Nook in Hamilton files countersuit against general contractor
May 15, 2023
Spooky Nook, the $165 million transformational mega-complex on North B Street in Hamilton, is embroiled in what has become a complex legal battle with its general contractor.
And on Monday, it became even more complex when Champion Mill Land LLC, which does business as Spooky Nook Sports Champion Mill, filed on Monday against a third party. Spooky Nook had previously stated in court documents that subcontractor Sofco Erectors, a co-defendant in the initial lawsuit filed by the project's general contractor, did not adequately brace the steel structure. Now, the sports and events complex claims the manufacturer, Star Building Systems, a division of Robertson-Ceco II Corporation (Star), is also responsible.
This lawsuit started in February when Cleveland-based PCS &Build filed a lawsuit against Champion Mill Land LLC, the entity that owns what's known as Spooky Nook Sports, the sports and events side of the 1.2 million-square-foot mega-complex that's bisected by North B Street. The lawsuit ― initially an 11-count suit filed on Feb. 10 in Butler County that also named owner Sam Beiler, a subcontractor, and multiple insurance companies ― has grown into an 18-count case with additional claims against Champion Mill Land, which is on the west side of North B Street.
The east side of North B Street is Historic Mill Land LLC and operates as Spooky Nook at Champion Mill, which houses the Champion Mill Conference Center and the 233-room Warehouse Hotel.
PCS is claiming they’re owed millions of dollars in costs and damages and levied two liens against both sides of the Spooky Nook complex for a collective $15.89 million. Eleven subcontractors, which has grown since the Journal-News first reported the lawsuit in February, have levied a collective $6.4 million in liens against both buildings.
In what is called a Third Party Complaint, Spooky Nook on Monday filed its complaint against Star Building Systems for negligence and product liability, alleging the manufacturer's steel "did not conform to representations made by Star." Spooky Nook claims in the complaint that "the defects, misrepresentations, non-conformities and/or Star's negligence were a proximate cause in the Building 500 collapse, which resulted in both harm and economic loss to Champion Mill."
Champion Mill Land LLC is seeking more than $25,000 for each count claimed.
Also, on Monday, the company responded to the general contractor's amended complaint, which added seven new counts against Spooky Nook and others. Spooky Nook also filed a five-count countersuit against PCS.
The suit filed by PCS is being heard by Butler County Judge Noah Powers, who in March designated the lawsuit as "complex litigation" ― which is defined as a case that presents unique challenges, such as the complexity of the case, the quantity or nature of documents at issue or the number of parties involved. The filing from the judge came after several requests for time extensions for the multiple defendants to respond to the plaintiff.
With the latest filings by Spooky Nook, the army of attorneys is expected to grow as the number of parties grows.
But Powers isn't the only county judge involved in this case. Last month, Spooky Nook also filed a crossclaim complaint against its co-defendant
And it's becoming even more complex as more attorneys become involved as the lawsuit by the project's general contractor has been met with counterclaims, and Spooky Nook has filed claims against one of its co-defendants. In April, Spooky Nook filed suit against Atlanta Specialty Insurance Company, saying they should have been compensated for more than the $250,000 it received for its insurance claim from the collapse of Building 500. That case is assigned to Butler County Common Pleas Court Judge Keith Spaeth.
WHY THE SUIT
At the center of the lawsuit is the catastrophic collapse of Building 500, a field dome that was to be a pre-engineered metal building. On March 26, 2021, strong winds blew through Hamilton, leveling all the steel beams erected. No one was injured in the collapse, but neighbors told the Journal-News it sounded like a bombing.
PCS claims the insurance companies need to make them whole to the tune of more than $11.9 million, which is also the amount of the lien it placed against Spooky Nook Sports. They placed a $3.96 million lien on Historic Mill Land, LLC, which operates as Spooky Nook at Champion Mill and houses the conference center and hotel on the east side of North B Street.
Despite the several parties and attorneys involved, the litigation boils down to a few, albeit very complex, issues. There are other issues to decide since, collectively, there are nearly 30 counts alleged by PCS and Spooky Nook, but it boils down to: who's at fault, who owes who and how much, and did anyone breach any contracts?
PCS claims Spooky Nook "materially breached" the contract by failing to provide an additional timeline for performance, being delinquent on outstanding approved payments, and failing to "timely finance the project." They specifically claim Beiler refused to pay additional and changed work performed by PCS at his direction. That claim is said to be supported by a project financing letter, but details were filed under seal. PCS alleges that letter increased the guaranteed maximum price for the Mill 1 project to $73 million, which was initially guaranteed not to exceed $69.89 million, according to the PCS lawsuit.
Spooky Nook and Beiler deny they are at fault and filed their five counterclaims against PCS.
Among the counterclaims, Spooky Nook states PCS was the one that breached its contract by allegedly failing to achieve "substantial completion" ― which PCS said in court documents the project is substantially complete, citing the number of events since the end of last year. And among other alleged failings, Spooky Nook said PCS caused the collapse of Building 500 due to "deficient work" and abandoned the project.
They’re also seeking declaratory judgments and said PCS committed tortious interference as it "intentionally interfered with the architect contract by shutting off the architect's access" to the construction management software.
PCS initially claimed in its Feb. 10 suit that Spooky Nook failed on a number of fronts, including to properly insure the project and give written notice about an intent to allegedly purchase non-compliant builder's risk insurance prior to the start of the Spooky Nook project. PCS had been unsuccessful in their attempts to recoup what they said they’re owed as it's related to the collapse.
The lawsuit also claims Spooky Nook "materially breached" its contract by failing to provide an additional timeline for performance, being delinquent on outstanding approved payments, and failing to "timely finance the project."
In its amended complaint, PCS said Spooky Nook defrauded creditors, saying it was civil theft. PCS also claims the sports complex violated the Ohio Uniform Fraudulent Transfer Act, alleging, among other things, the mega-complex attempted to obtain "an after-the-fact sales tax exemption."
The third new claim is for a declaratory judgment, saying the project is substantially complete.
Spooky Nook said in the response the allegations are the subject of a contemporarily filed motion to dismiss and will respond, if necessary, after the resolution of the motion to dismiss.
Among the other new allegations levied by PCS, it states another breach of contract claim against Old Republic Surety, and multiple claims levied against all parties, which include a quiet title, foreclosure of mechanic's lien, and a declaratory judgment that the project is a "private" project, claiming that "Champion Mill sent correspondence to PCS notifying of a purported ‘lien on public funds’ that had been recorded by a subcontractor and indeed asserting the right to withhold payment on that basis."
The Spooky Nook Sports Champion Mill project is a reimaging of the former Champion Mill paper plant that shut down in 2012. The plant was a major employer for the city, and it had sat vacant for a few years until Beiler and his team at Spooky Nook Sports in Manheim, Penn., visited the site several years ago.
Eventually, Beiler announced he would build a second Spooky Nook development, mirroring in many ways the original development, and several entities got on board with various types of contributions to the project in the form of contributions, grants, loans, tax credits and infrastructure improvements. Contributors to Spooky Nook include the city of Hamilton, the Butler County Commission, Butler County Port Authority, and Travel Butler County (formerly the Butler County Visitors Bureau).
Though it has seen many delays due to the COVID-19 pandemic and supply chain issues, the $165 million Spooky Nook development began opening in phases beginning in May 2022 on the east side of North B Street with the conference center and hotel. In December, the sports and events side began hosting events, which has since seen tens of thousands of people at the complex over multiple weekends.
About the Author
Michael D. Pitman has been a reporter in southwest Ohio since 1999. He's covered local governments in Warren and Butler counties, as well as state and national issues. He currently covers the cities of Fairfield and Hamilton.