Company files lawsuit over money owed for Southeast Polk stadium construction work

A subcontractor has filed a lawsuit against the Southeast Polk Community School District and main contractor Graphite Construction Group, claiming it's owed over $300,000 for work on the school district's new stadium.

Central Iowa Dirtworks filed the lawsuit in late May over its work on the district's $22 million multipurpose stadium, which opened last year. The project was part of a larger $92 million bond referendum voters approved in 2020 .

Dirtworks claims Graphite breached their contract by not paying for its work, while the school district is holding onto funds that could cover the gap.

Under Iowa law , public entities like a school district hold on to 5% of monthly costs due for labor and materials for construction projects.

The retained funds are to be paid 30 days after the public body officially accepts the completed project. There are provisions in the law for a company to request an early release of the money. A contractor may also hold onto 5% of payments to a subcontractor under the law.

According to Central Iowa Dirtworks' petition, the company received a $2.7 million contract for work as a subcontractor to Graphite on the stadium project in June 2021. Dirtworks completed its obligations and submitted invoices to Graphite, but Graphite hasn't paid for all the work, the petition says.

Central Iowa Dirtworks then sent a claim in September 2023 to the school district for $335,000 related to the work. The school district replied, saying the School Board had not officially accepted the project. The letter says the district will comply with the law and release the funds when the project is accepted or if there is an early request under the law.

The petition says Graphite sent a notice to Dirtworks in April 2024, demanding Dirtworks take action in court under the law despite the lack of final acceptance.

Dirtworks claims Southeast Polk district is holding money to pay contractors and subcontractors for their work that should be turned over to Dirtworks.

Work continuing, Southeast Polk School Board has yet to officially accept stadium

In its answer to the lawsuit, Southeast Polk denies the claim and says the district has paid what's owed to Graphite to date.

Although the stadium has been substantially completed, the district says, the work required on the master contract is incomplete, so the district has not given the project final acceptance.

It says Dirtworks is seeking $200,000 more than Graphite can legally retain. Graphite also provided a bond for the release of $668,000 in the district's retained funds.

However, the district says, Graphite has not requested an early release of the district's retained funds, nor has it sent a legally required notice to subcontractors and suppliers that it will request the funds' release, the district claims.

Meanwhile, Graphite alleges in its response to the lawsuit that Dirtworks broke its contract by not finishing work in a timely manner, failing to supply materials and other issues. The response also suggests Graphite will want to take the dispute with Dirtworks to arbitration.

A spokesperson for the district and an attorney for Dirtworks declined to comment. Attorneys for Graphite did not respond to emails seeking comment.

The School Board has still not officially accepted the stadium project. Although the stadium opened nearly a year ago and is being used, work remains underway on the project, which has been marred by frustrating construction delays .

According to information presented at recent School Board meetings, the remaining work has included correcting mortar coloring and security camera replacement. The district was retaining about $1 million in funds for the project as of mid-June, according to district documents.

A trial scheduling conference is scheduled for Aug. 6.

Chris Higgins covers the northern and eastern suburbs for the Register. Reach him at chiggins@registermedia.com or 515-423-5146 and follow him on Twitter @chris_higgins_ .

This article originally appeared on Des Moines Register: Company files lawsuit over money owed for Southeast Polk stadium construction work