Ritz Pays $1.1 Million to Settle Some Old Bills

Stolte Inc., the general contractor that built the lavish Ritz-Carlton resort hotel in Laguna Niguel, said Wednesday that it received $1.1 million from W. B. Johnson Properties, the hotel’s developer, to help settle $8.9 million in unpaid claims on the construction project.

“It’s a start. But there is a long way to go,� said John Stephens, Stolte’s executive vice president.

The payment comes less than a week after Atlanta-based Johnson Properties sold a 90% interest in the hotel to Prudential Insurance Co. of America for $90 million cash.

The check that Stolte received Wednesday came from an escrow disbursement account at Ticor Title Insurance Co. in Santa Ana, Stephens said. With the $1.1 million, Stolte was to pay the claims of five of the 55 subcontractors who worked on the hotel. But Stephens said that a week ago Stolte paid those five contractors with its own money when the payment from Johnson Properties was delayed due to the negotiations with Prudential.

Attorney Michael Willoughby at the Newport Beach office of O’Melveny & Myers, which has been handling payment of the contractors for Johnson Properties, said Wednesday that the hotel owners have agreed to pay an additional $700,000 to settle about 35 more of the claims. But he said the contractors involved must first release liens they have filed against the hotel property.

Next week, Willoughby said, the law firm expects to begin negotiations to settle claims with the remainder of the contractors.

Representatives of Johnson Properties blame the delay in paying contractors on the difficulty of sorting out claims for the very complex project. They recall that during the construction, many changes were ordered to make the Ritz-Carlton more lavish. The hotel opened last August.