Commerce Center's funding to change

Commerce Bank, the main financial backer of the Capitol View Commerce Center project in Harrisburg, will likely take over the job of paying contractors working on the project.

Contractors walked off the job site over the past month after developer David R. Dodd fell behind in making payments to them. Some didn't receive any payment, they said.

Several of them, including Herre Bros. Inc., H&R Mechanical Inc., and Weaver's Glass and Building Specialties Inc., also filed liens against the building for the amounts they are owed. Dodd is president of Advanced Communications, a printing company that will be the main tenant of Capitol View.

Dodd agreed that he's behind in paying some of the contractors, writing in an e-mail that the complexity of the project has made it difficult to make sure the money went to the right place.

The more than $25 million project has received $17 million in government grants and loans. Commerce executives were to meet with public officials June 12 to review the project. They were expected to work out a plan that would switch payment responsibilities to the bank, said Linda Walker, deputy director of the Mayor's Office of Economic Development and Special Projects. Commerce Bank executives did not respond to an interview request.

The Mayor's Office of Economic Development is auditing the project to make sure Dodd has used the public's money appropriately, said Ed Nielson, director of the office of economic development. Nielson conceded there needs to be more oversight over the tax dollars. It's more likely that confusion caused by the wide range of public funding might have caused payments to go to the wrong contractors, he said.

"It's a fascinating mosaic of public funding. The project is so complex with all this funding," Nielson said. "It looks like everything has been accounted for."

Dodd plans to move his printing business into 115,000 square feet of the building and lease the remaining space. He set up a company called Cameron Real Estate to develop Capitol View.

One contractor said he was considering suing Dodd. H&R Mechanical already filed a $1.25 million lien against him, and Herre Bros. filed a $1.2 million lien, according to lien records obtained from the county Prothonotary's Office. Dodd owes Weaver's $594,890, said Micki Weaver, owner of the company.

The Mayor's Office of Economic Development has acted as the clearinghouse for much of the money awarded to Dodd. The office stopped issuing checks to him to pay contractors May 9 when officials learned they were not being paid.

The state Department of Community and Economic Development is reviewing the project, too, said Kevin Ortiz, the agency's spokesman. The state has promised more than $5 million for the project. Ortiz would not comment on whether the state will stop funding Dodd or what action DCED would take if state funds were handled inappropriately.

Some contractors questioned why Dodd did not hire a general contractor for the job or a construction-management company to manage the project since he does not have a background in construction. Dodd started his own general contracting and construction-management company to build the structure and manage the project, even though Mayor Stephen R. Reed advised against it, Nielson said.

Dodd initially hired a general contractor and a construction-management group to tackle the work but later decided to take on the roles himself, Nielson said. Nothing precluded him from doing so, he said. And public funding was not yanked away because the project was already in motion, he said. Nielson admitted Dodd's inexperience in construction-management could have caused contractors to not get paid.

Dodd took on the construction roles to attract more minority business enterprises (MBEs) and women business enterprises (WBEs) to work on the building, he said. Cameron Real Estate was following the request of some of the project's funding sources, he said.

"It would have certainly been easier had we hired a single general contractor. We do have several construction professionals on our staff, plus the assistance of design/engineering professionals and consultants. Construction has gone fairly well."

There is no guarantee the bank will permit Dodd to finish the project. Since Commerce has the most money invested in the project, it gets to choose whether Dodd stays or goes, she said.

"The bank ultimately has the final say on how they are going to proceed. If they decide they want to go find someone with deep pockets to get it done, they can," Walker said. "Funders are meeting with the bank. After the bank meets with us, they will meet with the contractors. It's their call."

-