Golf course builders seek arbitration over payment

Agency owes $2.4 million for Arundel site, they say

April 19, 2004|By Childs Walker | Childs Walker,SUN STAFF

The Nebraska company that built Pasadena's Compass Pointe Golf Course says it is owed $2.4 million and hasn't been paid since November by the quasi-public Maryland agency that developed the project for Anne Arundel County.

Officials from Landscapes Unlimited LLC, which has built more than 500 courses around the nation, say they have been demanding payment from the Maryland Economic Development Corp. for months but have received no definitive answer on how or when they will be paid. They have filed for mediation with the American Arbitration Association.

The first question Landscapes wants settled by officials from the American Arbitration Association is how much MEDCO actually owes.

Landscapes' original contract with MEDCO, signed in 2002, was for $9.1 million, about $400,000 more than MEDCO has paid out. But Landscapes officials say that because of unforeseen factors such as bad weather, costs exceeded the original contract sum by about $2 million, and they are asking MEDCO to cover those costs.

`A unique experience'

"This is probably a unique experience for us in terms of being owed this type of money for this amount of time with no resolution in sight," said Jim Barger, president of construction for Landscapes Unlimited.

Barger said he is worried about his company's reputation with subcontractors, some of whom have not been paid because Landscapes Unlimited has not received payment from MEDCO.

Hans F. Mayer, executive director for MEDCO, refused to discuss any details of his company's contract with Landscapes Unlimited. He would say only that business at the public course, the first 18 holes of which opened last fall, has been "very good as long as it doesn't rain."

County assistance

MEDCO has asked for a $1.1 million bailout from Anne Arundel County to cover a shortfall in operating expenses on the $17 million project. Mayer has blamed a late opening caused by bad weather last year for the financial difficulties.

The request will be part of County Executive Janet S. Owens' proposed budget next month, but County Council members have said they would be reluctant to give MEDCO money because the county is facing a $15 million shortfall.

The shortfalls at Compass Pointe are the latest problem the agency has faced at that course and at other developments.

Last year, the county briefly stopped construction at Compass Pointe because sediment was running into nearby streams. And the agency's Rocky Gap Lodge and Golf Resort in Cumberland, which opened in 1999, reported $18 million in losses for its first four years.

Deadline passes

Landscapes Unlimited attorney Michael D. Munro sent MEDCO a letter Dec. 22 threatening to terminate the contract for Compass Pointe if payment was not received within a week. That deadline passed without action, and Landscapes officials met with Mayer in February to discuss the situation.

In a Feb. 24 letter to Mayer, Landscapes president Kirk M. Kyster called the encounter "a positive meeting" but urged MEDCO to pay "in the very near future."

On March 18, Kyster sent Mayer another letter saying that Landscape's bonding company was beginning to grow concerned about the lack of payment because it had received complaints from two subcontractors who hadn't been paid. Also in that letter, Kyster said Landscapes would begin moving toward arbitration.

On April 2, Mayer sent Landscapes an e-mail apologizing for his lack of response, saying he had been busy with the General Assembly session.

"We have been working with the bondholders, Anne Arundel County and others to put together a plan," he wrote. "When we have been able to structure this arrangement, we will be able to discuss this with you."

County officials, however, said they have not been party to negotiations between Landscapes and MEDCO.

Representatives from other companies involved with Compass Pointe, including Chamberlayne Ave. Development Co. of Baltimore and Billy Casper Golf, said they have been paid by MEDCO.

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