Bank, contractor fight with Harrisburg art museum over who gets paid first

HARRISBURG, Pa. (WHTM) – The contractor who built the Susquehanna Art Museum said it has not been paid for getting doors open earlier than expected. The bank that helped financed the project claims it, too, is entitled to get paid.

Both sides are fighting over who should get paid first.

Mayor Eric Papenfuse cut the blue ribbon in January to celebrate the newest attraction to Midtown Harrisburg. Just behind the party was the vault door that once belonged to Fulton Bank.

It is viewed as ironic as the museum owes Fulton Bank $3 million for helping to finance the project. SAM failed to make a principal payment of $1.5 million by the March 8 deadline. Fulton Bank formally requested the payment be made in August.

Around the same time, Harrisburg-based JEM Group, the contractors who built the museum, claimed they are owed $1.2 million.

Attorney Timothy Woolford spoke with ABC 27 on behalf of JEM Group.

“The contractor has been waiting for eight, nine months now,” he said. “It’s just not right.”

The museum has $1.2 million left in state funding to cover the costs. Woolford said the contract between the museum and JEM Group stated that cash is reserved for reimbursement of construction costs. He believes the museum is fearful of a lawsuit by Fulton Bank, which is why they halted payment to the contractors.

“[The museum] let them believe they would be paid for all their efforts,” Woolford said.

The Dauphin County Industrial Redevelopment Authority was the government agency that facilitated the project. Both JEM Group and Fulton Bank requested payments and claim the remaining $1.2 million is theirs.

Last week, the agency asked the courts to intervene. A judge is set to schedule a hearing this week for arbitration.

Woolford said when it comes to taxpayer-funded state grant money; the cash should not go to a bank.

“Many small business, they need the funds,” he said. “They did the work; they’re entitled to be paid. The bank can fight it out with the borrower in a different setting. As far as the construction, it should be paid for.”

Fulton Bank was unavailable for comment on Monday.

Papenfuse, who clearly stated his disdain for museums funded under the Stephen Reed administration, is no stranger to Harrisburg’s museum madness. Unlike the National Civil War Museum, Papenfuse believes the Susquehanna Art Museum could be a successful attraction with public and tourist support.

“I think that there are a variety of options available that allow the museum to continue, but it’s also going to require generosity of the people,” he said. “The people are going to have to fund the museum if they want to see the museum continue.”

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