The company that put a new roof on a problem-plagued building in Havelock has taken the first steps toward trying to get the city to pay the $85,000 repair bill.
Cheever Construction filed a pair of claims with the city’s Finance Department demanding payment for its work last fall on 6117 Havelock Ave.
The historic building’s owner, Maria Rico, signed the roofing contract with the company in October. But Cheever is going after the city for the money because it had every reason to believe the Urban Development Department was funding the project, said Cheever owner Wes Oestreich.
Urban Development supplied the engineering plans. It asked construction companies for bids. And after it picked Cheever, it reassured the company the funding was secure — in the form of a $174,000 city loan to Rico for façade and roof repairs, Oestreich said.
“We feel there was a reasonable inference there that they had a loan in place and they were going to support the cost of this project,” he said. “And then they pulled the funding. The mayor just pulled the funding.”
Cheever wouldn’t have done the work if it didn’t believe the city was backing it, according to the claim.
“But for the city’s representations, which were either fraudulently or negligently made, Cheever would not have replaced the roof on the property.”
Cheever had to file the claims before it could sue. The City Council can now accept them, deny them or simply ignore them. If the city rejects them or does nothing in two months for one claim — or six months for the other — Cheever can withdraw them and take the city to court.
The City Attorney’s Office typically makes a recommendation to the council, and it was still reviewing Cheever’s claims this week, said Chris Connolly, an assistant city attorney.
But earlier this month, Connolly was clear: The city has zero responsibility for the roof repair. Cheever had a deal with the building’s owner, not with the city.
“The city was talking with Cheever about the cost of putting the roof on. But there was not an agreement between the city and Cheever,” he said in early April.
He acknowledged Urban Development played a role in reaching out to contractors and ultimately working with Cheever and Rico. But ultimately, the contract was between the contractor and the building owner.
And the city had made it clear to Rico the loan wasn’t final until the mayor signed it, Connolly said earlier this month.
For months, though, the $174,000 appeared headed toward approval.
Rico signed the promissory note Oct. 24.
Cheever finished the roof in early November.
On Nov. 13, a Cheever employee emailed Urban Development, asking for the status of the payment. An Urban Development staffer responded the next day, saying he was hopeful the loan agreement would clear the mayor’s office within the week.
Rico signed more loan-related paperwork Dec. 13.
But in late December, Mayor Chris Beutler rejected the loan.
His chief aide explained.
"We simply could not justify nearly exhausting a business assistance fund for one owner when it could be used to help many other business owners succeed,” Rick Hoppe said in an email earlier this month.
The problems at 6117 Havelock Ave. had started several years earlier, when Urban Development launched a façade improvement program in Havelock. The initial $16,400 grant for Rico’s building kept growing as contractors kept discovering problems.
By the time the city made — and rescinded — the $174,000 loan offer, it had already spent $80,000 on Rico’s building.
It did offer her a revised loan earlier this year: $84,855 for more façade repairs, but nothing to pay off the new roof.
That offer still stood this week, Connolly said.