The company that demolished parts of the historic Dayton Daily News building at 45 S. Ludlow St. has sued Student Suites Dayton, LLC for allegedly not paying its nearly $800,000 bill.
The civil lawsuit filed Thursday in Montgomery County Common Pleas Court by Steve Rauch Inc. seeks financial damages and a foreclosure on the Mechanic’s Lien against Student Suites Dayton (SSD), which originally planned to build a 350-unit, $18 million housing complex that could serve Sinclair Community College students.
Steve Rauch said last week that he stopped working on the project when the billing cost for his work hit $869,000 and he still hadn’t been paid.
A demolition contract between Student Suites Dayton LLC and Steve R. Rauch Inc. specifies a payment of $1.292 million. Rauch said he stopped working on the project because he hadn’t been paid.
“What a mess that place is down there, isn’t it?” he said. “I’ve liened it — against Student Suites. They haven’t paid me a dime.”
Rauch said he initially held off on filing a lawsuit, hoping to get paid as the project moves forward. “We are not the bad guy that put a bullet in the deal,” he said.
Through an email, Student Suites Dayton declined to comment.
The suit alleged Rauch performed all demolition of the former Dayton Daily News and Schwind buildings, and related services. The cost, $775,195, has been due since Jan 21, 2014, the lawsuit alleges. Interest of 10 percent per annum on the principal has been accruing since then, according to the suit.
Rauch’s attorney, Gregory Page, said the total owed, including interest, is more than $900,000.
“Based on SSD’s ongoing refusal to pay the sums due and owing, Rauch caused multiple Affidavits for Mechanic’s Lien to be recorded against the property,” the suit alleges. “SSD’s actions, including, but not limited to, its failure or refusal to pay the sums due to Rauch, constitute a breach of contract.”
Besides compensatory damages and pre- and post-judgment interest of 10 percent, Rauch seeks attorney fees and costs, and for a judgment ordering the property be foreclosed and sold. He is also asking that the plaintiff’s liens be paid from the proceeds of the sale.
The city of Dayton, which originally committed $1 million toward the project, increased that to $1.215 million in April 2014. The city’s share went toward demolition and cleanup of the former Schwind Building property.
Aaron Sorrell, Dayton’s director of planning and community development, said at the time that the money was from additional grants, not city general funds.
Complications arose over the Schwind Building, which was demolished in 2013.
A deed restriction imposed by the U.S. Department of Housing and Urban Development limited use of the property to low-income housing, and the Students Suites project did not qualify.
Sorrell said that Student Suites has cited the restriction as a reason the project’s financing has been delayed.
The plan to rejuvenate the area for housing while leaving the original Dayton Daily News “bank” building — which is on the National Register of Historic Places — was announced in April 2013.
Reporter Steve Bennish contribute to this story