Subcontractors cry foul over J.T. Turner collapse

Savannah construction subcontractors and suppliers who say they are owed hundreds of thousands of dollars by J.T. Turner Construction are questioning how Turner can close his doors while his son, Tripp, continues to operate under another Turner company name in South Carolina.

Tripp Turner, until recently, was running his father's namesake company.

J.T. "Jim" Turner, who founded the original company in 1976, announced March 12 that the firm was closing its doors.

"J.T. Turner Construction Co. Inc. has attempted to honor all of its obligations but is unable to continue," Turner said in his written statement, adding that "J.T. Turner Construction Company of Savannah, Inc., a general contracting company owned by Tripp Turner, will continue to operate in the Carolinas."

That doesn't sit well with a number of subcontractors on this side of the river, many of whom are owed substantial sums by Turner's original company.

"J.T. Turner has closed its doors in the face of many of the same people that helped make them the successful company they were for many years," said Allen Bonner, owner of ABC Maintenance Services, Inc. "Some of these suppliers and subcontractors will survive this, but there are many smaller businesses that won't.

"On top of that, there are clients who are now having liens placed on their properties by subcontractors who haven't been paid, despite the fact that they paid Turner in good faith for the work. These people will have to pay again to have the liens removed and their projects finished," Bonner said.

"But the real injustice of all this is that J.T. Turner of Savannah - a company most of us had never heard of until about a year ago - will continue to operate in South Carolina as if nothing has happened.

"This looks like it was carefully planned, with other companies ready to roll once J.T. Turner Construction closed its doors," Bonner said.

Stanley Hurd agreed.

"It appears that, instead of crafting clear business decisions, Jim and Tripp simply developed a Plan B - J.T. Turner Construction of Savannah," said Hurd, vice president of C.S. Hurd Electrical Contracting Inc.

Hurd said Turner's now-defunct company owes the electrical contractor "several hundred thousand dollars," much of it due on the Savannah Law School project.

"We had no choice but to lien all ongoing projects," he said. "It was a difficult decision considering the long-term relationship we had with J.T. Turner. But, if we had continued to carry on, our deficit would have doubled by the end of this month."

Omega Steel Inc., is owed more than $200,000 for steel fabrication and other work - nearly $50,000 of that at the Savannah Law School. As with Hurd's company, Turner was paid for the work, but never paid the subcontractor, said Drexel Taylor, president of Omega Steel.

Guerry Lumber also is owed money and had filed nearly $100,000 in liens as of early March. Guerry president Steve Chick did not return requests for comment.

Both Jim and Tripp Turner delined requests for interviews for this story, but rather sent a statement through their publicist Friday afternoon.

"It was the intention of both Jim and Tripp to honor each of their obligations," the statement reads. "J.T. Turner Construction Co. Inc., Jim's Company, at one time had a balance sheet of several million dollars. Beginning in 2008, that balance sheet began to erode as there was little work available and that was at low profit margins.

"Over the years Jim Turner put more and more personal assets into his company. His hope and expectation was that he would hang on until he could pay off the debt his company accumulated during the recession. Turner Construction paid everyone it could. Eventually, it could not go on."

Early warning signs

Subcontractors and suppliers who have worked with J.T. Turner through the decades say the company's problems didn't develop overnight.

More than four years ago, in September 2010, the Turners called a group of their key subcontractors to a meeting in a conference room at First Chatham Bank in Savannah.

"One of the company's executives told us that J.T. Turner was putting together a plan to make it through the

recession and asked us to understand that payments would be slow but that they were taking the necessary steps to stay afloat," said Chris Williamson, president of Custom Cabinets by Williamson Millworks Inc.

"We asked for specifics on the steps but didn't get any definite answers," he said.

Lynn Moody, vice president of Hutson Plumbing, also was at that meeting.

"We've had a working relationship with J.T. Turner Construction for 39 years, most of them mutually profitable," Moody said. "But about five years ago, we began having delinquent pay issues with them. Because of our longstanding relationship, we tried to be understanding and continued to work with them, despite the fact that the assurances we got at that meeting never materialized.

"We carried their past due debt on our books and never charged them interest," he said. "It wasn't easy for us, as we were dealing with the same depressed economy, yet we paid our bills promptly and kept our payables current."

The situation came to a head early last month, Williamson said, when a group of subcontractors got together to see whether, collectively, they could do anything to keep Turner Construction from going under.

"We met with Jim and Tripp in their offices and presented them with a proposal: They would pay each sub 25 percent of the money owed them by the end of February. The remainder owed would be divided equally, interest-free, over the course of the next 12 months. They agreed and asked that we continue to work on current jobs," Williamson said.

"I received only two checks as a result of that meeting, neither in the agreed-upon amount."

Other subcontractors who had been at the meeting reported similar results.

"For three weeks in February, we received quarterly payments on the 25 percent. Then it all ended," Moody said.

Omega Steel's Taylor said it's hard to describe his personal disappointment in the outcome of that meeting.

"Both Jim and Tripp were there," he said. "Mr. Turner opened the meeting with a prayer. During the course of the meeting, he assured us all we would receive all monies due to us on both current and past work. They even went so far as to give us letters of guarantee, signed by Tripp.

"I was raised to believe that when a business colleague and friend gave you his word, you could bank on it."

The ripple effect

Subcontractors and suppliers aren't the only ones hurt when a company the size and scope of J.T. Turner abruptly calls it quits.

In this case, Turner's collapse left dozens of projects unfinished, with project owners or developers scrambling to find someone to complete the work.

What's worse, many of them have discovered that their projects are subject to liens by subcontractors Turner hired to do the work but didn't pay.

Because a lien is basically a claim on the property, owners cannot do any additional work until that lien is removed. If they paid the general contractor for the work, but the general contractor didn't pay the company that did the work, the property owner essentially has to pay the same bill twice.

That leaves many project owners caught between subs they need to pay and their banks, whose construction loans didn't account for double payments.

A search of liens filed against Turner projects turned up a total of $579,000 as of March 4, more than a week before the company announced it was closing.

Projects with liens on that date included the historic Berrien House on Broughton St., The Brice on Bay St., Savannah Law School, Wesley Monumental Church and a number of private homeowners.

Other liens, such as one on Sorry Charlie's, were listed as satisfied.

"It's a mess," said Bob Isaacson, owner of the Savannah Charley LLC group. "We paid J.T. Turner, but apparently J.T. Turner hasn't paid the subcontractors."

Because the work was completed on Sorry Charlie's on Ellis Square before Turner's announcement, the renovated seafood restaurant was able to open on schedule. However, Isaacson said, his company had to pay again to release liens.

Rick Buckley, owner of Savannah Harley-Davidson, said his new store was about halfway done when he learned that several sub-contractors had not been paid, despite the fact that he had affidavits signed by Turner indicating that he had paid his subs and collected lien waivers from them for all work done to date.

To remove the liens filed on his property, Buckley said, he has to pay the money owed, even though he had already paid Turner for it. He's signed a contract with Pinyan Construction to complete the work and hopes to open early this summer.

"Not paying is not an option," Buckley said. "We are going to complete this job."

In the company's written statement, Jim Turner said he "knows that clients and subcontractors he worked with for years are being hurt by the failure of Turner Construction. He has attempted to mitigate the harm to his clients who would allow him to do so by helping them obtain new contractors. Some of the money owed to subcontractors is being paid by the owners on current jobs, thereby reducing the subcontractor's unpaid invoices."

A tale of two companies

Meanwhile, questions linger.

"If Turner was paid, and the companies that did the work weren't paid, where has all that money gone?" Williamson asked. "And when did this second company start taking on jobs?"

A search of state records indicates JT Turner Construction Co. of Savannah Inc. was registered as a corporation with the Georgia Secretary of State on Sept. 21, 2010 - the same month JT Turner first called subs in for a meeting - with J.T. Turner listed as principal.

Hurd said when someone in his office brought the separate company to his attention about a year ago, he asked Tripp about it.

"He said one company was for residential and the other for commercial projects," Hurd said.

But, while Turner of Savannah is building high-end homes in the Carolinas, it's also taking over at least one J.T. Turner project in Savannah.

In an email to members Friday, executive director of Friends of Tybee Theater Melissa Turner (no relation to the construction firm) said construction on the historic project has resumed.

"After an unexpected interruption in work, construction will resume Monday on the restoration of the Tybee Post Theater," the email stated. "The Friends of the Tybee Theater board agreed this week to move forward with JT Turner Construction Company of Savannah to complete the restoration of the Theater. Members of the Theater's building committee, and board President Jim Kluttz met with the project managers for Turner Construction and all of the subcontractors working on the Theater project Thursday. The subcontractors have assured the Theater board that they all have all been paid for work completed and are eager to continue and complete the Theater restoration. Turner project managers said this phase of construction should take about six to eight weeks to complete."

Hurd confirmed Friday that a $25,000 lien his company had on the project has been satisfied.

Several subcontractors working in South Carolina indicated Turner of Savannah was current on its payables.

As for Tripp Turner, his current Linked In profile lists him with J.T. Turner of Savannah, but also lists his previous experience as president of J.T. Turner Construction from December of 2013 to March of this year.

While Turner said his son's company will continue working in the Carolinas (primarily at Palmetto Bluff near Bluffton, S.C., but also in Highlands, N.C.), no records of the company being registered in either South Carolina or North Carolina could be found, and the company's registration with the Georgia secretary of state lists a Savannah P.O. box as its office address.

In its written statement, Turner said "Jim Turner owns 100 percent of the stock in Turner Construction. Tripp Turner owns 100 percent of the stock in J. T. Turner Construction Company of Savannah, Inc. Tripp's company was formed in 2010 for bonded work and over time it became the vehicle for construction work in North and South Carolina. Jim Turner has never been a shareholder, officer, or director in Tripp's Company."

"Tripp's company does not owe any money to Turner Construction. In fact, to help his father's company during the last several years, Tripp's company loaned Turner Construction a substantial sum. That money is lost just like the money owed to Turner Construction's banks, clients, and subcontractors.

"It is Tripp's intention to carry on in the markets in which his company has been operating. His office is in Bluffton, South Carolina."

One company or two?

There was no mention of a second company when Tripp Turner addressed a crowded room of local business people in April of 2012 at the quarterly BiS luncheon sponsored by Business in Savannah.

"Change is inevitable, a necessary part of any business," he told the gathering. "But the things that should never change are your core values. My dad grew this business by focusing on relationships and the core principals of quality, service and dependability.

"No matter how much things change, we don't ever want to lose that."

Turner said the family-owned construction company had managed to make it relatively unscathed through the recession, crediting his father's work ethic, foresight, attention to business basics and planning.

"A dozen years ago, my dad decided we needed a recession plan," he told the group. "I'm not sure what he saw coming that the rest of us didn't, but he set out to put together a detailed, four-stage plan that ranged from minor cost cutting to a worst-case scenario that pared the company down to the two of us, a computer and the phone.

"Fortunately, it never came to that," he said, adding that the company was back on the upswing.

While neither Turner would directly respond to questions about those remarks, they indicated in their written statement that Turner Construction was dealing with excessive debt at the time but felt they would be able to work their way out of it.