Clovis News

Clovis targets developers of unfinished tracts

It's easy to spot California's newest ghost towns -- half-finished neighborhoods that testify to the state's devastated economy.

When developers run out of money, buyers may be left with only a skeletal tract house to show for their investment. And cities may be left with an eyesore, including not only the unfinished homes but incomplete infrastructure, including streets, lights, curbs and gutters.

Clovis officials are focusing attention on unfinished subdivisions, such as one near the city's eastern boundary on Shaw Avenue at Locan Avenue, where two 3,000-square-foot unfinished houses -- plywood exposed to the elements -- sit surrounded by finished but empty homes and vacant lots. Neighbors complain that vandals break windows, scrawl graffiti and leave trash.

The troubled Patriot Homes subdivision is in receivership -- not yet in bankruptcy -- and the city is seeking money from the developer to complete roads and other improvements. The city also wants to hand the subdivision over to a new developer to salvage or demolish about a dozen homes that at one time had a value of $5 million.

It's the first time in at least 15 years that Clovis officials have had to go after a developer for failing to build improvements, City Manager Kathy Millison said.

Developers typically rely on home sales to pay for work to complete projects. When the housing market crashed beginning three years ago, some were caught short.

Patriot Homes officials "haven't even finished half of what they are supposed to," said Scott Cross, a lawyer for Clovis.

Calls to Patriot Homes were not returned.

A court receiver has been named to sort out the financial affairs of Patriot Homes and its parent company, LB/L-DS Ventures Clovis, at the request of the bank that loaned money to the company, Cross said.

He said the receiver, San Diego-based Trigild, has been working with the city, but is limited by the court in the amount of work it can undertake. Efforts to reach Trigild were unsuccessful.

Steve White, Clovis city engineer, told the developer in a letter this month that it has until Dec. 9 to respond to the city and arrange an alternative schedule to complete the required infrastructure improvements, or else the city will stake a claim against a performance bond the builder had posted before starting work. The improvements include extending Locan Avenue south of Shaw Avenue and north of Santa Ana Avenue.

The city already has spent 400 hours of staff time to get the builder to meet the city's requirements, White said.

Other Valley cities face similar challenges.

Sanger is trying to get millions of dollars in public improvements completed for three developments, Senior Planner Ralph Kachadourian said.

Sanger's city attorney has prepared violation notices for those tracts so companies that buy the developments know that the infrastructure improvements are mandatory, he said.

In Kerman, city officials have been trying for more than a year to get an insurer to pay the city money for work that was supposed to have been done by a developer: landscaping and building a quarter-mile lane on Whitesbridge Road.

"It's our first experience with this, and if the industry doesn't clean itself up, we will have to get stricter," City Manager Ron Manfredi said.

The fallout could result in tougher rules for developers, said White, the Clovis city engineer.

And building industry officials know changes could be coming, including more paperwork and closer scrutiny by cities.

"Like any industry or profession, the guys who perform badly make it more difficult for those who follow the rules because it creates more rules," said Mike Prandini, president and chief executive officer for the Building Industry Association of Fresno/Madera Counties. "The good builders don't want the bad ones to get away with it."

Meanwhile, residents in the Patriot Homes tract in Clovis say the unfinished homes are being ruined by the elements and vandals. Security officers now roam the neighborhood at night to keep people out who don't belong there.

One of the partly built 3,000-square-foot homes was supposed to belong to Carlos and Selene Rico, who say they made a $10,000 down payment to Patriot. The outer shell of their dream home was built, but inside, only bathtubs and a fireplace were installed.

They say their down payment has not been returned despite several demands, a small claims court filing and a trip to the developer's Beverly Hills headquarters.

The couple now have bought a larger home in the same subdivision from another buyer through a "short sale." The home they bought, next door to incomplete houses, is 1,000 square feet larger and cost less than their dream house.

Even though the subdivision is only partly built, they like the neighborhood -- and got a great deal on their home.

But "I look out from this house and I can still see the top of the other house," Carlos Rico said. "I know this is a bigger home, but I still like that model."