Subcontractors claim Wynn not paying bills for extra work at Encore Boston Harbor casino

Boston Herald

Jonathan Ng

June 26, 2019

State gambling regulators are monitoring a dispute between Encore Boston Harbor and the project’s subcontractors who claim they have not been paid tens of millions of dollars for work done at the $2.6 billion Everett casino that opened Sunday.

Catherine Blue, general counsel with the Massachusetts Gaming Commission said she “will continue to monitor the progress of discussions between Encore Boston Harbor and Suffolk Construction regarding any unpaid subcontractors and I will bring any concerns raised to Encore Boston Harbor for their review,” according to a recent letter sent to one of the subcontractors.

Sue Mailman, owner of Worcester-based Coghlin Electrical Contractors, said her company is owed $30 million in change orders — work that is added to the original scope of work on a contract.

“There’s a process that usually happens to evaluate the changes every month between the subcontractors and the owner so that we’re allowed to bill for all the change that is happening,” Mailman said. “We were told specifically to do the work we were assigned and then ordered to do extra work. A lot of that piled up at the end and we have not been paid for a lot of the changes that happened.”

Mailman said Wynn Resorts, which owns Encore, sometimes brought change orders six to eight months after work was completed.

“They waited six to eight months to bring us in and would tell us that we’re not getting everything so here’s 60 cents on the dollar,” Mailman said. “Now you kind of have a gun to your head, you can imagine. We need the money to pay our suppliers and employees. It’s a lousy business practice where the owner wins and it’s not often recognized that subcontractors are performing the work.”

“What bothers me is that we should somehow accept less for some reason,” Mailman said. “These casinos were supposed to be about good skilled-trade jobs for people of color, women and veterans. There’s a lot of subcontractors that worked on this project. I’m not Wynn Resorts, worth billions and billions of dollars. They’ve opened their doors and we’re not going to be paid for the work we did.”

Michael McDonagh of the Associated Subcontractors of Massachusetts, said his members have had multiple meetings to discuss payment and change order issues with Wynn Resorts, which owns Encore.

“We’ve sent an email to the Gaming Commission since early 2018 when we heard from some of our members not getting paid for work done,” McDonagh said. “That’s just not right. We’re talking about family-owned, small businesses employing local people who have been hurt by this out-of-state company. What’s happening with Wynn is that change orders are happening far too frequently and that means subcontractors have to pay employees, supplies and carrying costs. These are small businesses that can’t afford to finance the $2.6 billion Wynn project.”

Wynn Resorts, in a statement issued to the Herald, said it had met its financial obligations.

“Encore Boston Harbor has paid all invoices presented by our contractor, Suffolk Construction,” the statement reads. “Subcontractors work directly with the contractor, not Encore Boston Harbor. Encore Boston Harbor has no outstanding invoices with Suffolk Construction. The relationship between Wynn Resorts and Suffolk has always been cordial and professional.”

Peter Townsend, owner of Watertown-based M.L. McDonald, said his company is owed more than $4 million in change orders from Encore Boston Harbor. His company did finishing services including fireproofing and painting the restaurants and casino area.

“We’re on a line of credit with the bank and have to borrow money to finance the work we did with Encore,” Townsend said. “We pay our workers weekly and vendors monthly … We’re paying interest to the bank and taking capital that would otherwise be used for running our business and it affects our ability to grow.”

“I’m north of $4 million (owed) and others are way past that and Wynn will want to negotiate a haircut, and that becomes a business decision,” Townsend continued. “Do I take the lower amount and move on or do we fight for the full amount? Everyone who worked at Encore is on the same boat.”

Dan Antonellis, a spokesman for Suffolk Construction, the primary contractor for the project, said in a statement to the Herald: “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.”

https://www.bostonherald.com/2019/06/26/subcontractors-claim-wynn-not-paying-bills-for-extra-work-at-encore-boston-harbor-casino/