An ongoing international effort to collect an unpaid $62.8 million bill has triggered legal action in Western Washington federal court that has halted long-planned financing and construction of a $17 million fourth tower at Vancouvercenter.
The suit also stopped condominiums sales inside the existing first three phases of the project completed in 2004 in downtown Vancouver.
The legal dispute that began in 2008, has Cerner Corp., a global health care technology company based in Kansas City, Mo., going after assets in several countries owned by Ahmed Saeed Al Badi Al Dhaheri, a citizen of the United Arab Emirates.
Al Dhaheri, through his company, Washington-based Vandevco Ltd., is the owner of the three completed phases of Vancouvercenter, just east of Esther Short Park. He also is sole proprietor of iCapital LLC and Belbadi Enterprises LLC based in the UAE.
In the suit, filed in Western Washington U.S. District Court in Tacoma, Cerner claims that iCapital, a health care technology company, first fell behind on an agreement in 2008 to pay Cerner $94 million for installation of an integrated software platform serving 17 health facilities and 86 primary care clinics in the UAE.
Cerner attorneys claim that Dhaheri, as sole proprietor of iCapital LLC and Belbadi Enterprises LLC, still owes Cerner $62.8 million from arbitration settlements in 2012 and 2015.
iCapital won the original contract from the UAE Ministry of Health to install a medical records system linking its hospitals and clinics and then hired Cerner to do the work. iCapital fell behind on payments to Cerner from the first deal but then also failed to make good on the arbitration agreements.
In the suit against Belbadi Enterprises LLC, Cerner accuses Dhaheri of violating corporate law by bypassing Vandevco Ltd. in collecting rental revenue from Vancouvercenter tenants in the amount of $3.2 million since 2008. It also says that Vandevco continued to convert apartments in the complex to condos for sale in violation of the court restraining order.
“Belbadi (Enterprises), through use of bank accounts located in the United States, has essentially served as Dhaheri’s personal piggy bank,” the suit claims.
To resolve the case, Cerner is pursuing Dhaheri’s assets located in Washington, Oregon and Massachusetts, as well as in France, Switzerland and the UAE.
There are obstacles to pursuing the case in the UAE because, according to the lawsuit, Al Dhaheri – purported to be the 10th richest man in the UAE – is the brother of the country’s Minister of Justice.
The lawsuit further said that Dhaheri and/or one of his several companies owes money to 10 additional creditors. One of those, Apira, a United Kingdom software firm, is owed $3 million. According to the court filing, an arrest warrant for Dhaheri was secured on behalf of Apria in the UAE in November 2015 to no avail.
City left hanging
Chad Eiken, director of Community Economic Development for the city of Vancouver, said the city had only just learned about the situation.
“The lawsuit does cast a pretty big shadow over the project moving forward,” Eiken said. “The city really wants to see this (south tower) succeed and continues to help them get it up and going. But this is dependent on their ability to pull it off.”
In the most recent deadline agreement with the city, Vandevco was to have the south tower “substantially” completed by fall.
“We expect that construction will take about a year, so this new delay is eating into that 12-month construction deadline,” Eiken said.
The south tower project is planned as a six-story building with 110 apartment units on the southeast corner of the complex. The first three phases of Vancouvercenter, a mixed-used property includes rental apartments, condominiums and retail space. Construction of the fourth and final phase was to be finished by Oct. 31, 2017.
Of the original 112 apartment units built in the first three phases of Vancouvercenter, Vandevco converted 95 to condominiums in 2015 and sold them. But three condo sales this year were caught up in the Cerner vs. Dhaheri tangle and are on hold.
Steve Horenstein, a Vancouver attorney who has been assisting Vandevco in lining up financing for fourth tower construction, said a HUD loan agreement through Berkadia Commercial Mortgage is in the works.
“Of course, the litigation must be resolved before the loan agreement can move forward,” Horenstein said. He estimated the construction loan would be between $16 and $18 million.
Nawzad Othman, Vandevco representative, said the legal dispute between Cerner Corp. and iCapital and Al Badi (Dhaheri) “came out of left field.”
“We have been in development (of Vancouvercenter) for 18 years…we want to complete this project,” Othman said. “We already have gone to the city requesting building permits. The suit is obviously meant to intimidate Mr. Al Dhaheri, but it belongs back in the UAE where it started.”
Gary Grenley, a Portland attorney representing Dhaheri and Vandevco has asked federal court Judge Ronald Leighton to dismiss the lawsuit on jurisdictional issues.
“There’s a long history between Cerner and Al Badi Al Dhaheri,” Grenley said. “Most of that history is in the Emirates. That’s where the dispute ought to be resolved.”
Dhaheri is a 1981 graduate of Lewis & Clark College in Portland and serves on its board of trustees. He became interested in developing Vancouvercenter in the late 1990s. After completing the project’s first three phases, plans for the fourth tower stalled with the Great Recession. The city previously has agreed to several extensions for completion of the fourth tower.
Cerner Corp. is a publicly traded company with approximately 22,000 employees worldwide. In its most recent fiscal year, the company reported revenue of $4.7 billion.
A Cerner spokesman declined comment on the legal action against Dhaheri.
Cerner is represented by Holland & Knight law firm in Portland. Belbadi and Vandevco have engaged Garvey Schubert Barer, with offices in Portland, Seattle and elsewhere.
