County sues contractor over shell building, says structure not built to specs

David Penticuff, Muncie Star Press
·5 min read

MUNCIE, Ind. — The Industria Centre shell building that became the planned home for Living Greens Farms was not built to agreed specifications, according to a lawsuit filed by Delaware County officials.

The civil complaint filed Tuesday asserts the issue is causing more spending, to retrofit the structure, by both the county and the incoming occupants.

The shell building at 2450 Fuson Road. County officials have filed a lawsuit against the contractor claiming the structure, built in 2014, does not meet agreed specifications and must be retrofitted to accommodate its new owner, Living Greens Farms, which purchased the building last year. Cost to the county for the additional work will be $1.5 million. The county's complaint says it paid $4.2 million interest payments on the building during the years it stood vacant.

Delaware County, Delaware Advancement Corp. and the Delaware County Redevelopment Commission are plaintiffs in the lawsuit, alleging that the contractor, C.H. Garmong & Sons of Terre Haute, and two of its subsidiary companies deliberately spent less on construction than had been predetermined in a economic development agreement from 2014.

The company "promised that it would use at least $5.850 million in direct construction costs for the actual construction of the shell building," the complaint says. But county redevelopment and DAC "both have learned that the defendants made substantial and substantive changes to the design and construction of the shell building by reducing their obligation, changing the load limits and structural components which affected the construction time and costs."

The complaint says county officials believe Garmong changed the specs and spent less in construction than it was obligated for construction of the building.

"DAC and DCRDC demand and insistent upon an accounting to be conducted by an independent accounting firm familiar with construction costs and expenses to examine the books, ledgers and records of the defendants to determine the legitimate and actual costs of construction," the complaint says.

More:Indoor farming company could purchase Delaware County Shell building

The shell building was erected along Fuson Road in the Industria Centre. The complaint says that Garmong came to Delaware County officials and pitched the idea of it constructing a shell building to attract employers to the county. The structure would be placed on about 35 acres of land owned by the county redevelopment commission.

Shell buildings are incomplete structures designed to offer prospective employers a location with the building being finished to meet the employer's needs.

Starting in the summer of 2014, over a period of several months, "Garmong constructed the shell building allegedly based on the design approved by the state of Indiana and Delaware County for the shell building."

"At no time did Garmong ... ever advise DAC or DCRDC or the County that design changes had been made to the building mezzanine, roof and girder system to make the building less structurally sound than what was originally represented to DAC and DCRDC," the complaint said.

The complaint said the costs of paying interest and maintaining the completed structure were to be paid for with revenues from the county’s Community Revitalization Enhancement District and the Economic Revitalization Area in the Industria Centre.

After construction, the shell building wound up costing the county $4.2 million in interest payments alone during the course of its vacancy. The county made interest payments at the rate of $600,000 a year and had maintenance costs of $10,000 a year for the empty building. The county also had to keep insurance on the site as well as other expenses.

Garmong did not provide any leads, contacts or other information as to potential tenants or buyers for the shell building until it was purchased in 2022, the complaint said. Eventually, Living Greens Farms, a Minnesota-based company that produces green and leafy vegetables indoors by way of vertical farming, chose the shell building as a production facility.

In 2021, when Living Green officials were investigating the site they looked over the plans provided by Garmong and visited the building, the complaint said.

"After a lengthy inspection period by engineers and other professionals hired by Living Green Farms, Inc., DAC and DCRDC were advised that the blueprints provided by Garmong ... were not accurate and were inadequate as to theirneeds for the building," the complaint said. "Living Green Farms, Inc. advised DAC and DCRDC that therewere discrepancies between the plans and blueprints and what was actually constructed with respect to the roof, mezzanine and steel girders."

Living Green Farms and Delaware County entered into a new agreement last year by which Delaware County would pay $1.5 million to help retrofit the building and Living Greens Farm contributed another $1 million toward the costs in addition to the money needed to complete the build-out of the interior. The county money will come from the county redevelopment commission.

More:Officials: Even vacant, Industria Centre shell building still helps economic development

In all, Delaware County, DAC and the county redevelopment commission are alleging breach of contract, fraud and misrepresentation and breach of good faith and fair dealing. It also requests an accounting of Garmong's finances regarding the project and a "refund of all money that was not used of the required $5.85 million for constructioncosts, an amount sufficient to compensate the plaintiff for all damages arising from the breachof contract by the defendants, damages for the willful and intentional actions of the defendants,reasonable attorney fees, punitive damages and all other relief proper."

The lawsuit was filed in Delaware Circuit Court 2.

Garmong did not return a call Wednesday seeking comment.

Elizabeth Rowray, chief economic development officer for the Economic Development Alliance, said plans to house Living Greens Farms at the site remain on track.

"We have been told that Living Greens is still moving towards their goal of becoming a member of our community, but we do not yet have a targeted completion/opening date." she said.

In a January press release, Living Greens President and CEO George J. Pastrana said the first phase of construction would be completed at the site by the second quarter of 2024.

David Penticuff is a news reporter at The Star Press. Contact him at dpenticuff@gannett.com.

This article originally appeared on Muncie Star Press: County sues over shell building, says structure not built to specs