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Austin architectural firm sued in dispute over planned hotel


Highlights

The developer claims it had made Sixthriver well aware that the project’s budget was $8.1 million.

Bids from contractors ‘exceeded the project budget by 60 percent to 70 percent and millions of dollars.’

The developers behind a proposed East Austin hotel are suing a local architectural firm, claiming they were given “defective and valueless” plans that have put the project a year behind schedule and well over budget.

The lawsuit against Sixthriver Architects Inc. was filed this month in Travis County’s 419th District Court by 1109 East Sixth Street LLC, which had hoped to start construction on a 40-room boutique hotel at 1109-1113 E. Sixth St. last year.

David Kline of Kline Properties and Kline Ventures is a director of 1109 East Sixth Street LLC, according to filings with the Texas Secretary of State’s office. City of Austin records refer to the hotel project as the Kline Hotel.

In its filing, 1109 East Sixth Street LLC says it signed a contract with Sixthriver in August 2015 “in which defendant agreed to serve as architect of record and provide the usual and customary architectural, engineering and other related services” for the project.

The contract called for Sixthriver to be paid $510,675, according to court records.

For that fee, 1109 East Sixth Street LLC said it expected a hotel design that included 40 rooms in three to five different configurations, a ground-floor lobby, retail space with a café, fitness center, conference space, lounge, pool deck with stage and bar, hotel offices, storage space, laundry facilities and a two-story, 39-space parking garage.

The developer claims it had made clear to Sixthriver that the project’s budget was $8.1 million. However, when bids from general contractors came in, “each exceeded the project budget by 60 percent to 70 percent and millions of dollars.”

Sixthriver “defaulted under and materially breached” the signed contract, the suit claims.

“Once defendant demonstrated that it was unable to redesign the project to meet the project budget without dramatically and materially modifying the scope of the project program identified in the contract and agreed to by the parties, plaintiff exercised its right to terminate the contract for cause,” the suit states.

In a written statement provided to the American-Statesman, Sixthriver said the situation is a highly unusual one for the firm.

“In our decades of experience in the Austin market, we have always taken pride in not having disputes with clients, or quickly resolving any disagreements amicably,” Sixthriver said. “Unfortunately, our repeated efforts in this instance have not been successful.”

The dispute has delayed the hotel by at least a year, 1109 East Sixth Street LLC says in its lawsuit.

A sworn statement from Bruce Weir, an architect hired by the hotel’s developer as an expert witness in the lawsuit against Sixthriver, is included in court records. In it, Weir says, in part: “It is my opinion that damages have been incurred by the owner and these damages to the project resulted from negligent acts, errors and/or omissions in the design and administration of the project.”

Weir alleges Sixthriver “failed to prepare an adequate preliminary evaluation,” “failed to adequately update an estimate of the cost of the work during design development” and “failed to properly prepare construction documents,” among other claims.

In addition to breach of contract, 1109 East Sixth Street LLC also accuses Sixthriver of negligence/professional malpractice.

The lawsuit seeks actual damages, attorneys’ fees, expert witness fees, court costs, pre- and post-judgment interest and “such other relief, general or special, in law or in equity, to which the court believes plaintiff is justly entitled.”

A trial date has not been set.



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