Newell: Political war over Hard Rock collapse fueling public skepticism

Hard Rock Hotel developer's attorney speaking publicly for first time in WWL exclusive

Newell Normand
January 27, 2020 - 5:27 pm
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This past Friday, the same day protesters descended on City Hall demanding accountability and transparency from city leaders about the crumpled pile of steel and concrete at Canal and Rampart, representatives from 1031 Canal Development LLC reached out to WWL Radio and asked for an opportunity to set the record straight about what they called “misinformation and radical allegations.”

On Sunday, 1031 Canal Development placed a full-page newspaper ad featuring an all-caps declaration that “WE DID NOT DO THE CONSTRUCTION,” “WE DID NOT DO THE ENGINEERING OR THE ARCHITECTURE,” and “THE SITE AND DEMOLITION ARE NOT UNDER OUR CONTROL.”

Attorney Kerry Miller joined Newell in studio Monday afternoon on behalf of his clients, 1031 Canal Development.

“For the record, there are no preconditions to this interview or anything along those lines. You said you wanted to set the record straight, so I’m going to give you this opportunity straight up,” Newell began. “Tell us what it is that you want to set straight.”

“There was an unfortunate event last week that happened with the tarp,” Miller said. “That seemed to generate a Twitter-fueled flash mob making accusations against the owner of the project. So we thought this was the right time to come out and let the interested public know what the owner has been doing, because accusations have been that the owner isn’t doing enough… they have been working very, very hard to try and get the bodies out. They hired paramilitary experts to try and go into the building, people who specialized in this in Iraq and Afghanistan.”

“What was their assessment?” Newell asked.

“The engineers would not permit them to go in.”

“Whose engineers?  Yours, or OSHA’s, or who?”

“Engineers retained by 1031 Canal, and also as consultants of the city.  When the building collapsed, an emergency declaration went out, which prohibited anyone, including the owner, from getting access to the site… what you’re dealing with now is a very technical, complex situation.  The engineers have had to model the building in its existing state, not structurally sound or secure. The overriding concern was, there was no way to access where the bodies might be located without risking further collapse of the building and risking additional lives.”

“With the emotion surrounding this issue, transparency should be key,” Newell said. “We heard about implosion, then that came off the table in favor of taking it down in pieces. Now, implosion is back on the table. We put the tarp up, it’s blown away, we hear it can’t be put back up again, and within hours someone made the effort and got it done. It seems like we have this giveth-and-taketh away mentality here, and with each occurrence of that, the public’s skepticism and cynicism goes up. So we get to this ad that was posted that says ‘we didn’t do the construction.’ What is that about? What message are you trying to send with that statement?”

“We weren’t the contractor - that’s what it says.”

“But your general contractor is a principal owner of 1031 Canal Development LLC! As well as a subcontractor!  So how can you make that statement, ‘we did not do the construction?’

“Because 1031 Canal was not the general contractor on the building.”

“I understand, but he’s a principal owner - you don't see the apparent conflict there in making this statement?” Newell pressed.

“Not from that standpoint, and not with respect to the fact that a lot of the allegations last week were directed at the Kailas family.”

“Let’s take British Petroleum as an example,” Newell continued.  “They didn’t own the rig.  They didn’t own the drilling operations, all of that was outsourced, it’s the same thing. But they took ownership from day one, they took ownership of the issue and put their money at risk and settled with the general contractor and the subs after the fact.  You know as well as I, in the construction industry, developers are where it all ends.  If there’s a shortage in the means of others hired in the development of that project, the developers are the ones that are on the hook.”

“Not when you’re dealing with a case that is a construction or engineering defect case,” Miller said.  “If you were building a house, and you hired a general contractor, and one of the laborers on site got hurt or killed because a roof collapsed, nobody would be going around saying ‘Newell Normand is at fault here, because he’s the owner.’”

“But I wasn’t in business with the contractor,” Newell replied.  “Part of the problem here is the inherent conflicts in the way 1031 Canal is set up.  What you’re saying here is that ‘my partner in 1031, the general contractor, is at fault.  We didn’t do it, he did it - but he’s my partner?”

“We’re not saying that. I’m not here to point fingers,” Miller said. “Accusations were directed, maybe racially motivated or not, at the Kailas family. We thought that was very unfair. Just like the Mayor said about people posting those pictures last week, about being distasteful - we are better than that. Let the facts come out. Let OSHA do their investigation, let the investigation be revealed in April. Let the other experts evaluate this and make reports, let the court cases go forward, where experts will issue reports and be deposed, before accusations are made that people are responsible for certain things. We’re pointing out common sense aspects of what happened here. 1031 Canal, the owner, the majority owner, entities controlled by the Kailas family, are not general contractors, not engineers, not architects. Those are simple facts that people need to be aware of before they jump to conclusions and make accusations.”

“So when it was revealed that there were unlicensed electricians on that job many months before October, and folks were complaining about that… internally, how did 1031 Canal remediate that situation, when one of the owners of the development company was the electrical subcontractor who was guilty of that practice? These are the things that are coming up that make it all sound disingenuous. I understand the Kailas family is probably upset because they’re taking the brunt of this, but some of this, he [Mohan Kailas] created! He’s the developer, he put this team together. If there is a question about the quality of construction, or uncertainty about value engineering, when you say ‘we didn’t do the engineering or architecture,’ those in the industry understand that’s not necessarily true either!”

“Kailas company, and 1031 Canal, does not have an engineer on staff. They don’t!” Miller said. 

“Did they have a third party expert that dealt with that on their behalf?” Newell continued. “Forward-leaning development teams always hire third party experts to watch the contractors, watch the subs, make sure they’re getting the quality and control in the project they desire. You do so, more likely than not, when they’re your partners on the development side. Because it makes it complicated. All the more reason to be more transparent, and the more reason people are suspicious!”

Hear the entire interview in the audio player below.

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