Spooky Nook in Hamilton given until next month to respond to lawsuit

Eight subcontractors have placed more than $5.5M in liens against Spooky Nook project.

Spooky Nook Sports Champion Mill will have another month to respond to the Feb. 10 lawsuit filed by its general contractor over insurance claims.

PCS &Build is suing Spooky Nook, its owner Sam Beiler, subcontractor Sofco Erectors Inc., and two insurance companies claiming they’re owed millions of dollars in costs and damages after the collapse of a building due to a 2021 wind storm. PCS also said Spooky Nook “materially breached” its contract by failing to provide an additional timeline for performance, being delinquent on outstanding approved payments, and failing to “timely finance the project.”

Spooky Nook officials requested they be allowed to respond to the lawsuit by April 17, which was agreed to by PCS, according to documents filed on Wednesday in Butler County Common Pleas Court.

The $165 million Spooky Nook Sports Champion Mill development incorporates the former Champion Mill paper plant that shut down in 2012. Several years ago, Sam Beiler announced he would build a second Spooky Nook development, mirroring in many ways the original development in Manheim, Penn.

The Champion Mill Convention Center and Warehouse Hotel, known as Mill 2 on the west side of North B Street, came online in phases starting in mid-2022. The sports complex, known as Mill 1, started to come online in December, and has since hosted several events that have attracted tens of thousands of new visitors to Hamilton.

Though Spooky Nook’s response to four out of the 11 counts won’t come until next month, officials did offer a more lengthy reaction to the lawsuit claims, which has been posted on their Facebook page. The Journal-News has reached out to PCS’ attorneys, Michael Frantz Jr. and Andrew Hannah, requesting comment.

Officials with Spooky Nook said though the “root cause” of the lawsuit is the collapsed building that was under construction by Sofco Erectors, a PCS subcontractor, they claim the collapse was caused by “defective construction” and has led to cost overruns and project delays.

The building collapse was known as Building 500, a field dome that was to be a pre-engineered metal building. On March 26, 2021, strong winds blew through Hamilton, leveling all the steel beams erected. No one was injured in the collapse and neighbors told the Journal-News then it sounded like a bombing.

PCS claims in its lawsuit that Spooky Nook failed to properly insure the project and purchased noncompliant builder’s risk insurance before the start of the project. PCS claims Intact, the insurer for the overall project, has risk coverage limited to $250,000, which is more than $500,000 below the full cost of the collapse. That’s the amount they’re seeking from Sofco and their insurers, Old Republic Insurance and Old Republic Surety.

“Spooky Nook has attempted to work through the timing and cost impacts of the collapse and to negotiate with PCS, the related insurance companies, and the other relevant parties to resolve the dispute. To date, these efforts have been unsuccessful,” according to a statement from Spooky Nook.

“Notwithstanding Spooky Nook’s efforts to resolve the dispute, PCS has taken steps to escalate the dispute by attempting to file liens against the projects, filing a lawsuit against, among others, the Spook Nook ownership entity and PCS’s subcontractor, Sofco Erectors Inc., and threatening to foreclose on the projects. These tactics, although unproductive and distracting, will have no impact on the day-to-day operation of the facility or Spooky Nooks’ commitment to vigorously defend PCS’s claims and pursue Spooky Nooks’ own claims against PCS for breach of contract, a comprehensive audit of the projects, and the damages suffered by Spooky Nook as a result of the project delays and cost overruns.”

PCS has filed two liens against Spooky Nook. The general contractor filed an $11.9 million-plus lien against Mill 1 on Feb. 20, 10 days after they filed the lawsuit. But they also filed a $3.96 million lien against Mill 2.

Eight subcontractors have collectively filed 10 liens on one or both projects. Nearly $3.47 million in liens were filed against Mill 1 and more than $2 million in liens against Mill 2, according to Butler County records.

Spooky Nook officials also stated that PCS vacated the projects “leaving several of its subcontractors with outstanding claims for unpaid work” and the general contractor “was required to post a payment bond on the projects to cover payments owed to subcontractors.”

Spooky Nook officials said they have notified the bonding company of these outstanding claims and intends to work “to ensure that PCS’s subcontractors are treated fairly and properly compensated for work performed on the projects notwithstanding PCS’s decision to abruptly leave the projects.”

“In the meantime, Spooky Nook will remain open and operational to offer our guests an incredible experience while the dispute with PCS is resolved in the courts,” Spooky Nook officials said. “The facility is actively growing events and, most importantly, having a positive impact on the City of Hamilton, its residents, and the surrounding area.”

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