A luxury apartment opened in South St. Paul last year. Payment disputes over the project persist.

When a sleek apartment complex opened in South St. Paul last summer, Mayor Jimmy Francis hailed the project as the suburb’s first market-rate residential development in over two decades.

People swiftly signed leases to rent one of 265 units at The Yards and Backyards apartments, a boxy structure whose name nods to the city’s rich history as a booming stockyard town.

“The project has been really successful by most accounts,” City Administrator Ryan Garcia said.

But behind the scenes, the apartment’s general contractor and various subcontractors have been bickering in court over payment for years. Allegations that one company abandoned the project, and that another failed to compensate a construction firm, are the basis of two lawsuits filed in Dakota County District Court.

And records show subcontractors have placed at least four liens totaling about $345,000 on the property since February 2024. One has been satisfied, but three remain, including a lien recorded as recently as Jan. 13.

“It’s always in our best interest to get them resolved as quickly as possible,” said Ben Beard, executive vice president of the project’s developer, the Beard Group. Beard said the payment disputes won’t impact renters, but he characterized them as “more unusual than what we’ve typically seen.”

“This has been more difficult than projects in the past,” he added.

Francis, the mayor, said he wasn’t aware of the lawsuits and liens because the city stepped back from the project early on, entrusting it to a private developer.

The complex’s popularity, he added, proves that residents of South St. Paul — long a magnet for affordable housing — have an appetite for the amenity-rich living that the Yards and Backyards embody. A one-bedroom apartment runs for roughly $1,600 to $1,900 per month, with the residence boasting several communal amenities: two gyms, a pizza oven, a virtual golf simulator and an outdoor pool.

“The Beard Group was able to … show that it can be done,” Francis said, touting the building as “forever an amenity in South St. Paul.”

The site on which the apartment now sits was once an aging parking lot, a mostly empty space facing an old, redbrick stockyard building that’s since become a popular wedding venue.

In the early 2000s, city officials pledged to supplant surface lots and other suburban mainstays with more “urban-style” development, Garcia said. About 20 years later, Garcia started calling developers he hoped would see opportunity in the barren slab overlooking Concord Exchange N.

One of them was the Beard Group, a Minneapolis-based company with a knack for building amenity-packed housing in cities where that living style is scarce.

“We never say no to those kinds of conversations,” Beard said.

With the company on board, the city scored around $800,000 from the state to clean up the site, demolish an old building and finance storm water infrastructure, Garcia said.

But construction proceeded in fits and starts. As the COVID pandemic raged, the Yards, the first phase of the project, was “plagued by product shortages and labor shortages,” Beard said.

Similar delays snarled the Backyards.

Then the apartment’s general contractor took a subcontractor to court.

Almost seven months before the first building opened, Nottingham Construction, a firm headquartered in St. Paul, accused Oklahoma-based Black Diamond Nationwide of missing deadlines, damaging material and failing to complete required work.

The subcontractor’s “actions put the entire Project in jeopardy and effectively held the Project hostage,” the March 2023 complaint read.

A judge granted Nottingham a nearly $800,000 judgment against Black Diamond after the general contractor had to hire a replacement subcontractor to correct the deficient work. (Attempts to reach Black Diamond were unsuccessful, and a Minneapolis-based attorney involved in the suit said his office no longer represents the company.)

Soon after, Nottingham faced its own allegations of nonpayment. A subcontractor in February placed a roughly $110,000 lien on the property, contending the general contractor owed the group thousands for asphalt work.

“We don’t do [this] very often,” Chris Grimes, a project manager for the subcontractor, Park Construction Company, told the Minnesota Star Tribune. Nottingham paid the group in full about a month later, records show.

“There’s no ill will from our end of things,” Grimes said.

But more liens followed. One construction company demanded some $70,000 from Nottingham for roofing work; another firm said this January that the general contractor owed it over $150,000 for plumbing and heating projects.

Nottingham hasn’t satisfied the former lien, records show. That prompted the construction company, Advantage Construction, to file suit in December 2024 against the general contractor to recoup the sum it’s allegedly owed.

Greg Johnson, the president of Nottingham Construction, didn’t respond to multiple interview requests. An attorney representing the company declined to comment on pending litigation; a lawyer for Advantage Construction also declined to comment.

Other defendants listed in the complaint include a bank, several subcontractors and the Yards and Backyards. Beard, the developer, said his company isn’t inserting itself in a legal battle between a general contractor and subcontractors.

“Developers like to keep their hands out of that,” he said. “All it does is create more conflict and issues if we get involved.”

But he added that Nottingham has been slow to hand over its payment applications — an accounting of invoices indicating how much companies are owed.

Now, with the Yards almost entirely occupied and the Backyards quickly filling up, the Beard Group is attempting to “hold Nottingham’s feet to the fire,” Beard said.

“Our goal is to close out these projects here sooner rather than later, make sure everyone’s gotten paid and move on with the next,” he said.