City of New Orleans releases Six Months of Delays by Hard Rock Hotel Site Owners

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April 22, 2020 – The City of New Orleans released the following statement regarding delays at the site of the Hard Rock disaster and the City’s efforts to ensure that the owners of the property, The Kailas family / 1031 Canal Development LLC, are held accountable:

“From the outset, the City has been clear: 1031 is responsible for the collapse, for the consequences of the collapse and for demolishing the partially collapsed building,” said Mayor LaToya Cantrell. “The City has been more than patient as 1031 has failed, multiple times, to engage a qualified demolition contractor and propose a safe and acceptable demolition plan. But the City’s patience is not unlimited. 1031 Canal must be held accountable for their collapsed building, and their time is up.”

“The City shares the frustration of our residents, and fully acknowledges that this property cannot remain in its current state and must be addressed immediately — via a safe and well-developed demolition plan,” said City Attorney Sunni LeBeouf. “The remains of the deceased workers must also be returned to their families. All of New Orleans continues to suffer as a result of this collapsed building, and further delay is not an option.”

The Kailas family’s repeated shift in direction has led to six months of delays in fulfilling its legal obligation to demolish the building, cycling through multiple contractors without moving a demolition forward to date:

The Kailas Family’s PLAN #1

Initially, national demolition company Brandenburg was engaged, and described by the Kailas Family / 1031 Canal Development as “the A team” in complex demolitions. But they ultimately refused to enter into a contract with Brandenburg, because the Kailas family deemed their proposal too expensive.

The Kailas Family’s PLAN #2 and PLAN #3

The Kailas family / 1031 Canal Development then engaged another company, Kolb Grading. After several months of negotiations concerning both demolition by implosion (Plan #2) and demolition by conventional means (Plan #3), 1031 Canal Development’s insurer determined that Kolb was unable to demonstrate either that its team was qualified or that its plan was feasible and safe. Kolb attempted to modify its plan to address those concerns, but failed to submit a plan that could be approved as safe, and 1031 Canal Development’s insurer ultimately refused to proceed with Kolb because Kolb’s plan had become unsafe and too expensive.

The Kailas Family’s PLAN #4

1031 Canal Development’s insurer then suggested that they engage yet another company, D.H. Griffin, to demolish the property via implosion. The City reviewed Griffin’s qualifications, and found them acceptable. After more than two months of negotiation, the Kailas family / 1031 Canal Development decided for the third time to break off negotiations with a demolition contractor, over the price of the demolition contract. Griffin’s contract price increased because the insurance premium cost increased. The Kailas family ultimately sought a cheaper alternative.

The Kailas Family’s PLAN #5

The Kailas family / 1031 Canal Development then reengaged Kolb, even though Kolb was previously unable to demonstrate either the qualifications of its team or the safety and acceptability of its plan. For the first time since their building collapsed, on late afternoon Friday, April 17, 2020, the Kailas family submitted an actual detailed demolition plan, for which the City is expediting its review as part of the permitting process.

While the City is currently engaged in an expedited review of the demolition plan, with the hope that the same may be feasible — if the Kailas family’s most recent demolition plan is unable to proceed for any reason, the City is prepared to take action as may be appropriate to ensure this public hazard is addressed.

The City remains committed to the same key priorities it has championed from the beginning: respectful removal of our people’s remains, safe and efficient demolition of the site, and reopening the area to business.

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