A mixed-used building on East Second Street is at the center of lawsuit involving the building’s owner, along with the construction companies and engineering firms that worked on the project, after the building apparently began sinking during construction.

A conditional use permit for the building was approved in 2017 for the three-story mixed use building at the corner of Second and O’Brien Avenue for what had previously been a vacant lot. The building was planned to include ground floor commercial space and one residential unit, and six residential units on the second and third floors.

The owner of the building, 139 East 2nd Street Lofts, along with Malmquist Construction, C&H Engineering and Surveying, Slopeside Engineering, and Archer Excavating have been involved in litigation over the building since an initial complaint was filed in Flathead District Court in March 2019.

In November 2018 while the structure was under construction it was discovered that the building was “settling substantially and significantly” beyond the variances calculated by the engineer, according to court documents. The owner says, in documents, that it was notified by Malmquist that no “additional weight could be added to the structure including the work necessary to complete the building” resulting in damage to the structure.

The owner lists the cost to repair the issue is $795,000 and that it was costing $18,000 per month in expenses as completion was being delayed to resolve the issue, and in addition it had lost two condo sales as a result of delays.

The owner claims negligence on the part of Malmquist Construction saying that it failed to complete a property inspection of the site prior to construction to ensure the building would be constructed within parameters, and that Malmquist committed a breach of contract because of its failure to complete the project.

Malmquist, in documents, says that while it did discover the building was settling there is no connection between anything it did or failed to do that caused the issue, but rather damage was the result of circumstances beyond its control.

In turn, Malmquist filed a complaint against C&H Engineering and Surveying claiming that it “failed to conduct an adequate soils examination” prior to providing recommendations for subgrade improvements necessary for the building’s foundation.

C&H Engineering denies Malmquist’s claim and also filed its own complaint against Slopeside Engineering, which it says replaced it on the project. C&H, in documents, says that Slopeside provided geotechnical services and recommendations that altered the design of the building and conflicted with its recommendations, and that C&H was not consulted about how site conditions would impact its recommendations.

Slopeside denies any wrongdoing and also filed a counter claim saying that Archer Excavating did not perform work on the site in compliance with designs, a claim Archer also denies.

An attempt at a settlement of the lawsuit was unsuccessful in August last year, according to a document filed in district court.

The construction of the new building also caused damage to the Whitefish Community Center building.

Flathead County owns the community center building, but the City of Whitefish owns the property it is located on next to the Whitefish River. Flathead County Commissioners recently approved a settlement agreement that calls for repairs to the community center building.

City Council also recently approved a plan that would allow for that repair to take place on the property it owns underneath the community center.

Whitefish City Attorney Angela Jacobs said because the repair includes driving helical piers into city land, Council needed to approve the remediation plan as part of a settlement agreement.

Based upon information relayed to her, Jacobs recently noted, the parties involved in the lawsuit are apparently near reaching a settlement agreement and construction on the mixed-use building is expected to be finished by the end of the year.

Under the agreement approved by the city and county, $177,000 will be paid into a trust that will be used to repair the community center building.