photo by: Journal-World photo/Chad Lawhorn

The Village Cooperative development at Sixth Street and Queens Road sits empty of workers on July 23, 2018 after the project's construction company suddenly ceased operations.

This is the time dozens of residents were supposed to be moving into a unique multimillion-dollar west Lawrence housing project for people 62 and over. Instead, work has been stopped after the project’s construction company suddenly went out of business.

Construction work has been halted since July 3 at the Village Cooperative project at Sixth Street and Queens Road, a representative of the project’s development company confirmed. On July 3 officials with Minnesota-based Real Estate Equities Development received notice that Ohio-based OMNI Construction Company Inc. had ceased operations.

That’s creating some problems for Lawrence seniors — some of whom had already sold their homes — and were planning to move into the development later this summer. Now, there is at least two months’ worth of construction to be completed, and it is uncertain when a new construction company will begin, said Andrew Schaefer, a vice president with Real Estate Equities Development.

“But there is absolutely zero question about whether this project will be completed,” Schaefer said. “The project will be completed.”

After learning of OMNI’s demise, Schaefer said his company immediately shut down work at the site, hired a security company to keep a 24-hour watch on the property and began discussions with the construction bonding company that had provided coverage to the project.

A construction bond is designed to ensure that if a construction company is unable to meet its obligations, the bonding company will step in to ensure the project is completed.

Schaefer said that is what will happen with the Village project. He said the bonding company, Fidelity and Deposit Company of Maryland, currently is working on finding a contractor to take over the project. It will be required to build the project to the same specifications and warranty levels as originally planned. Schaefer said he wasn’t sure when a contractor would begin work, but he expects the bonding company to have secured a contractor within the next week. No construction work on the project can take place until a general contractor — licensed by the city — is added to the building permit.

Schaefer said 44 of the 52 units in the housing project have been sold to buyers. He said a “handful” of the buyers have had to make other living arrangements while they wait for the project to be completed. He said Real Estate Equities Development is helping those buyers on a “case-by-case basis” with temporary living arrangements.

Schaefer said he is not able to offer a timeline on when residents will be able to move into the complex, which is set up as a cooperative. That means each resident actually owns a share of the entire building rather than being a tenant in the building.

US-40 & Queens Rd, Lawrence, KS 66049

We’ve reported that the project includes a bar and pub, exercise room, a multipurpose room, a woodworking shop, a car wash and a below-ground parking garage. Construction began in September 2016. But as the Journal-World reported in August 2017, the project experienced an unexpected delay. At that time, representatives for the project said weather delayed the start of the underground parking garage and that the project was having a hard time finding available subcontractors because of a construction boom that was occurring in Kansas City.

In hindsight, was that delay actually a warning flag for the problems OMNI was facing? Schaefer said he didn’t want to speculate on that point.

“I just know there have been a multitude of challenges on the project and a contractor that wasn’t doing a good job of managing the timeline of the project,” he said.

Real Estate Equities Development has done dozens of housing projects across the country, but it had used OMNI only once before, Schaefer said. He said the company was not aware of any of the problems OMNI was facing.

“We obviously would never have signed up to go through this experience,” Schaefer said. “It is always easier in hindsight.”

The project has led to at least one lawsuit in Douglas County District Court. Manhattan-based Nechita Carpentry Inc. has filed a suit seeking to be paid for about $68,000 worth of work that has been completed on the project but has not been paid by the contractor.

That case was filed in December 2017 and, according to the court file, it appears it is still unsettled. Nechita has sought payment from the bonding company but had not yet received it, according to the latest court filings.

Schaefer said his conversations with the bonding company lead him to believe all subcontractors will get paid, and he remains confident the project will be a success.

“This is obviously a delay, but we believe it will be a fantastic project when it is done,” he said. “It will be a real asset to the community. We have a great set of (buyers). It is going to be a great community.”

Attempts to reach OMNI for comment were unsuccessful. The company’s main phone line went to a voicemail that did not include a message. An attempt to reach a buyer of one of the units also was unsuccessful.