LIC biz says group slow on paying fees

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The operators of a Long Island City electric contracting company have alleged that a nonprofit company that builds charter schools for minority students in the five boroughs is shortchanging them out of more than $25,000 for work they did on a site in Washington Heights.

Siegfried Espinoza, owner of Rico Electric, and business partner Barry Hirsch said they were not paid in full for electrical work they performed as a sub-contractor on the New Heights Academy Charter School, located along Amsterdam Avenue in Manhattan’s Washington Heights.

They allege that Manhattan nonprofit Civic Builders, which develops charter schools, originally planned to pay them an estimated $600,000 for work on the school. Espinoza had said the developer did not pay his company until several months after they completed the project and that Rico Electric was shorted $60,000.

Rico’s contract was with Kel-Mar Designs Inc., the general contractor that had been brought on by TLM Group, Civic’s construction manager. Espinoza said he and his partner will settle with Civic for $17,500 with an additional $7,500 each from Kel-Mar and TLM.

The total amount that Rico Electric will be underpaid is now estimated between $25,000 and $30,000, Espinoza contended.

David Umansky, chief executive officer of Civic Builders, said the company did not have any comment on the matter.

“Civic builds charter schools in minority neighborhoods, so how could they refuse to pay a minority company?” asked Espinoza, who is Hispanic.

A spokeswoman for state Assemblyman Michael Gianaris (D-Astoria) said his office had attempted to contact Civic’s chief executive officer several weeks ago, but had received no call in return. But she said she understood Rico Electric might be able to settle with Civic Builders for a substantially lower number than the money its owners claim they are owed.

Rico Electric was unable to perform work for several months after finishing the charter school because the company could not keep up with benefit payments for its workers, its owners said.

Hirsch said Civic Builders had agreed to pay $330,000 for work on the school and an additional $270,000 in “change orders,” which is work that is added to an original contract that alters a project’s completion or cost.

“They killed our cash flow,” he said. “The union took our men because we could not pay them benefits.”

Rico Electric received a final $200,000 payment in January for work that had been completed the previous April, Hirsch said.

But the developer had told the electrical contractor that it would not give them $60,000 that had not yet been paid, he alleged.

“They said the project wasn’t worth that much after they allowed for it to take place,” he said. “We’d broken it down for them in figures. At the time, they kept telling us ‘just do it.’ They used the words ‘good faith,’ but they’ve put us in a difficult position. We’re a small company, so this kills us. They are federally funded.”

Reach reporter Nathan Duke by e-mail at or by phone at 718-260-4566.

Updated 5:50 pm, October 10, 2011
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