New Orleans Drive Shack Project Halted and Its Response to Liens

If you have been to New Orleans in the last few years, you have seen a number of major construction projects. The renovation and addition to the world renowned World War II museum; a number of high end condominium and apartment complexes; and New Orleans’ very first Four Seasons Hotel. Claiming land in New Orleans can be a difficult task for many reasons.

Recently, New Orleans has been struck hard by COVID-19 pandemic. New Orleans was one of the very first cities to have a major outbreak of the virus, which is suspected to have been amplified due to Mardi Gras. Bourbon Street and the majority of its tourist destinations were subsequently ordered to be closed. Hotels were closed. New Orleans was not open for business.

One major project that had begun was the construction of the Drive Shack. Drive Shack is described as a high-tech “augmented reality” golf driving range. Drive Shack clearly wanted to capture some of the $10 Billion of revenue generated in New Orleans from its tourism.

However, when coronavirus struck New Orleans in early March, Drive Shack almost immediately halted its construction, leaving its contractors scrambling for answers and money owed.

One of those contractors, Durr Heavy Construction, LLC (“Durr”) is allegedly owed more than $2,300,000.00. The general contractor, VCC, has filed liens as well claiming to be owed in excess of $7,000,000.00. The enormity of these amounts, which are alleged to be past due, can have a devastating effect on a construction company.

The swift actions taken by Durr show the positive effects and consequences thereof.

Shortly after Drive Shack owners halted construction, Durr filed a lien in accordance with Louisiana Private Works Act. Those rights are more fully described in a previous blog article. Essentially, Durr’s lien preserved its right against the land in the event it is not paid for its work.

Drive Shack’s Response:

When liens are filed for nonpayment, you will often find that the filing contractor is alleged to have performed deficient work. Thus, the general contractor and/or owner did not pay that contractor for that reason. However, sometimes, projects halt for other reasons, such as the coronavirus pandemic.

Drive Shack having realized their predicament and probably reassessed of its future in New Orleans stated publicly that “Drive Shack… has every intent to finish this Project, despite the delay caused by the pandemic.” In addition, the property owner, stated “I would expect that the general contractor would pay off the liens and any and all lawsuits will be dropped.

While these statements don’t appear to have been acted upon yet, it shows the effect liens and lawsuits have in construction projects where payments are not made timely. The lien process is efficient and must be done in order to get paid in the construction industry.

Let’s hope this project goes through and New Orleans tourism regains traction.