UPDATED: MAY 11, 2018 6:03 PM — An architecture firm working on the long-proposed iSquare Mall + Hotel on International Drive has nearly $1.4 million owed to it according to an arbitrator, and is seeking enforcement by an Orange County judge that gives the option of placing liens on the developer's assets.
An arbitrator ruled in late January that HKS was owed more than $1.394 million. That includes more than $1.244 million in unpaid design service fees on the iSquare project, plus interest and arbitration expenses.
This latest debt challenge for Mathin on the proposed iSquare follows his announcement on May 7 of having reached an 18-month extension agreement with a lender over foreclosure on the I-Drive property.
HKS is the most recent design architect on iSquare. It entered into a contract with BlackMINE Group in September 2015, with an agreed upon fee of more than $11.061 million for work on the project.
HKS was hired to provide services that include concept and schematic design, design development, construction documents, GMP negotiation and permitting, and observation of construction.
Schematic design was carried out until February 2016, when Mathin told HKS to stop work immediately, according to the arbitration award.
The developer earned City Council approval in March 2016 for rezoning on the 5.6-acre site at the southeast corner of I-Drive and Kirkman Road, and entitlements for up to 23 stories with two hotel towers totaling 539 keys, up to 434,831 square feet of retail/commercial space, and a seven-story parking garage.
HKS then filed a claim against BlackMINE for unpaid architectural fees. The two sides went through arbitration with the American Arbitration Association's Construction Industry Tribunal.
Arbitration was completed in late January of this year. In addition to determining the money owed to HKS, the arbitrator concluded the architecture firm wasn't responsible for construction cost estimates or the project's eventual construction cost overruns, which Mathin has said are why the project has been delayed for more than two years.
HKS' attorney is asking the Orange County judge to enter a final order and final judgment enforcing the arbitration award.
Mathin told GrowthSpotter on Friday he will consider counter-suing HKS for including his personal name in the filing for final judgment, because only his company, BlackMINE Group, was involved in the service contract.
If the judge enters a final judgment, a certified copy can be filed by HKS in the public record of Orange County, or any county in Florida.
That would allow HKS to place a lien on assets owned by Mathin or BlackMINE Group, which can then be enforced through garnishment, foreclosure or other collection remedies, said K. Michael Swann, partner at Maitland-based law firm Snyderburn, Rishoi & Swann, which specializes in arbitration.
Matthew Clear, principal with HKS and director of its Orlando office, declined to comment on Friday.
Mathin said on Friday that if he secures financing to begin construction he'll pay the debt to HKS and they'll move forward together.
"If iSquare is never built I'll have to call and settle with them," he said Friday. "At the end of the day everything is workable together."
Mathin claims that halting the project in 2016 was necessary to conduct value engineering, because estimated construction costs had ballooned to $468 million, well above the budgeted $400 million meant to include hard and soft costs.
Real estate financing advisor Ablum Brown & Company is working with Mathin to re-market the iSquare development to private equity groups and institutional lenders to fund its construction.
Changes to the project's plans, likely in scale and luxury, may be sought to make the project more viable to investors, president Tom Ablum told GrowthSpotter earlier this week.
HKS is not the only service provider Mathin has yet to pay for work on the iSquare design.