Encore Boston Harbor Subcontractors Feel ‘Cheated’ after Tens of Millions of Dollars Allegedly Remain Unpaid

Posted on: June 28, 2019, 08:29h. 

Last updated on: June 28, 2019, 08:31h.

Ed Silverstein @casinoorgedsilv Read More

Expertise: Legal, Tribal Gaming.

Encore Boston Harbor subcontractors say they are still waiting to get paid for work — totaling in the tens of millions of dollars — on the Wynn Resorts casino which opened Sunday.

These lingering charges apparently relate to change orders — which are work directives added to an original contract — required in the building of the $2.6 billion Everett venue.

“It’s a lot of money,” Michael McDonagh, CEO of Associated Subcontractors of Massachusetts, which represents firms statewide in the construction-related specialty trades, told Casino.org.

The total amounts range from $30 million owed to Worcester-based Coghlin Electrical Contractors to $4 million owed to M. L. McDonald of Watertown — which provided such specialties as fireproofing and painting, sources said. There are also smaller amounts owed to dozens of Massachusetts subcontractors.

“These dragged out six to eight months.… Subs were not paid… for work they’ve done,” McDonagh said. The subcontractors were engaged by the general contractor on the project, Suffolk Construction.

In a statement released Friday to Casino.org, a spokeswoman for the Encore Boston Harbor said it “has paid all invoices presented by … Suffolk Construction.

“Subcontractors work directly with and are paid by the contractor, not Encore Boston Harbor.  Encore Boston Harbor has no outstanding invoices with Suffolk Construction,” the company statement continues.

But McDonagh counters that the “owner [Wynn Resorts] and the general contractor [Suffolk Construction] are partners in a project like this.”

“They have a nice beautiful casino and they need to pay for it,” McDonagh added. “Our subs feel like they were cheated on this project and it’s not right.”

Workers Need to Get Paid

In effect, McDonagh says that subcontractors were “financing the building of a new casino.” While waiting for payments, they still need to pay their employees each week, as well as pay their vendors and suppliers.

“We have to pay our workers on a weekly basis,” M. L. McDonald President Peter Townsend told Casino.org. He explained that some of the change orders “may be in dispute. A lot of it isn’t.”

“We’re still waiting to get change orders so we can bill and get paid for it,” adds Townsend who has three decades of experience in construction. “[It’s been] a difficult a project as any I’ve experienced … to get things approved.”

Discussions among subcontractors and Suffolk Construction on the unpaid bills continue. Notification about the late bills was also made to the Massachusetts Gaming Commission.

In a June 11 letter from commission General Counsel Catherine Blue to an attorney representing a subcontractor involved in the dispute, Blue promises to “continue to monitor the progress of discussions between Encore Boston Harbor and Suffolk Construction regarding any unpaid subcontractors…. I will bring any concerns raised to Encore Boston Harbor for their review.”

Many Change Orders in Project

The commission letter obtained by Casino.org also reveals there are allegations of “deficient design documentation.” These concerns apparently relate to schematic drawings given to subcontractors.

Michael McDonagh confirmed to Casino.org there were an “inordinate amount of change orders on this project.”

Susan Coghlin Mailman, president of Coghlin Electrical Contractors, told the Worcester Telegram & Gazette her family-owned business also worked on the MGM Springfield and the Plainridge Park Casino in Plainville. “We witnessed something completely different at [the] Everett casino than we witnessed at Plainridge and MGM,” she said.

Suffolk Construction did not immediately respond to a request for comment from Casino.org.

The Boston Herald quotes Dan Antonellis, a company spokesman that, “Suffolk continues to work directly with its subcontractors to resolve any outstanding legitimate issues. We are optimistic we can achieve satisfactory conclusions to close out a successful project.”

In the Encore Boston Harbor statement, it adds the “relationship between Wynn Resorts and Suffolk has always been cordial and professional.”

Record Fines

Last month, Wynn Resorts agreed to pay a record $35.5 million in fines to the state of Massachusetts after it failed to disclose accusations of sexual misconduct against former CEO Steve Wynn.

Encore Boston Harbor is Massachusetts’ third commercial casino to open. Plainridge Park — a slots-only facility — opened in 2015. The $960 million MGM Springfield opened last August.