Cover II: The buck STOPS where? Builder folds; owner fights Housing Trust

Wednesday, March 12, 2008

By Jake Nichols

Jackson Hole, Wyo.-Courtney Campbell is sixth-generation Jackson. Her great-great grandfather homesteaded in Jackson Hole. He built a house with his own two hands before the days of building permits, gable soffits, or R-Value ridge run insulation. It’s still standing on the Elk Refuge.

Courtney’s house on East Kelly is four years old. It was assembled in a warehouse in Pocatello, Idaho, and trucked here. She says it’s already falling apart.

Campbell, like so many others, could not afford to buy or build in the valley her ancestors tamed. After a four-year stint in the Navy, Campbell returned to her hometown and put her name on the list for a shot at an affordable home from the Jackson Hole Community Housing Trust. When she landed a cozy, brand new two-bedroom house from the Trust in 2003, her dream was coming true – and the nightmare, just beginning.

Campbell, the unit’s first owner, noticed problems with the roof straight away. Shortly after moving in, she said, a steel fire door fell completely off its hinges and rolled down the basement stairs. By the winter of ’04, she began documenting and photographing leaks and ice buildup after, she said, the Trust never came to look at any of the problems. Campbell felt that her itemized punch list was being ignored and, as president of the homeowners association for the 28-unit, 12 Pines development on East Kelly, she spoke for other homeowners who were also experiencing problems with their newly-built houses. At first, Campbell was told to direct all issues to Ben Ellis, whom she understood was the general contractor (GC) during the initial building project.

“I should just become a GC like Ben Ellis - I could probably do a better job,” Campbell said. “[He] wasn’t very helpful and wasn’t very knowledgeable about construction in general.” By January 2005, she said, Ellis wanted nothing more to do with Campbell and her complaints; he blocked her emails and told her he had “washed his hands of the development.” (Ellis did not return multiple calls for comment.)

The Housing Trust’s executive director Anne Hayden Cresswell said that Ellis’ role and responsibility on the project was limited to the duties of what she termed a “project manager.” Technically, the Trust acted as the general contractor on 12 Pines and the neighboring Arbor Place to cut costs. “There are a lot of benefits to structuring it the way we did,” Hayden said. “General contractors today are making 12 percent on a project and we’re a private non-profit.”

Without a definitive ‘buck stops here’ option, Campbell then turned her grievances over to the Trust, who she said “knows little about building.” Ice damming issues and snow buildup on her north-facing roof were causing leaks and damage. Her heating bills had skyrocketed to $327 per month.

Campbell said repair crews sent by the Trust caused more problems than they fixed, and that conversations with Hayden and Program Director Bettie Pomeroy were fruitless. “They are not easy to deal with and they do not try and help their homeowners,” Campbell said, rating her satisfaction with the Trust as a “zero” on a scale of one to 10.
“There have been a handful of construction defects at Kelly Street,” stated Hayden. “We expect to have punch lists and problems crop up that need to be fixed. We feel like we have worked hard to address the problems. We have stepped up to the plate, and said that we will stand behind it, because the Housing Trust was the GC on this project and we have communicated this to the homeowners - that we acknowledge our long term relationship with [them].”

Regarding Campbell’s accusations that the Trust was difficult to deal with and shuffled their feet at every turn, Hayden respectfully disagreed. “After three years of addressing the problems, we can say it hasn’t been a straightforward and simple process to discern the source of the problem,” Hayden said. “The issues that we had are largely connected in one way or another with the cold roofs. These problems manifest themselves in the winter and so it takes time to discern the source of the problem, identify a solution and execute the solution. At every turn we had the fixes in place by the oncoming winter season.”

Wrong builder, wrong time
But by 2005, the Housing Trust was already losing faith with the development’s builder – Superior Modular Systems (SMS) out of Pocatello, Idaho, a business that closed their doors during the writing of this story (see sidebar).

“At the time, SMS was, bar none, the most capable entity to do the job,” Hayden said. “We hired SMS after doing due diligence and checking all the modular builders. In 2002, they had a good reputation, believe it or not. We can say we have been disappointed with SMS. As disappointed with SMS as anyone could be.”

Original construction flaws were compounded by poor onsite stitching – the process of putting together the prefab pieces of a building – which included one known error by a local siding crew.

Chad Strand, construction manager for the Housing Trust, stated that mistakes were made by the SMS stitch crew. Also, a local subcontractor covered venting outlets for the roof by accident. Strand recalled, “[They] said, ‘That was probably our fault. We probably sided right over where the vent was supposed to be happening.’” Holes were later drilled around the roof in the fall of ’05 to improve air flow but ice damming problems resurfaced that winter.

“Drilling those holes in the roof is a really Mickey Mouse way to try and solve the problem and ventilate that roof,” said Greg Cisco, a prominent Jackson builder. The Planet asked Cisco to look over Campbell’s house.

“If this was built to county standards of insulation then why are you having this amount of ice damming? It shouldn’t be there,” he commented. “A well-insulated and vented roof should not have icicles, especially on the north side. If I had built this, homeowners would be coming after me.”

Further remediation continued only after Campbell managed to arrange a meeting with the board of the Housing Trust in June of ’06. There, she said, then-attorney for the Trust, Hank Phibbs, recommended that the Trust fix the roof - otherwise, Campbell had the right to sue the organization.

The Trust then hired Kasey Mateosky’s KM Construction to effect repairs on the East Kelly units in question. Courtney Campbell’s husband Beau happened to be employed by KM at the time and was in on the job. “We did what the Trust would let us do,” he said. “We didn’t do what we should have done. We should have taken the roof off.”
Mateosky recalled, “There were a couple of things done incorrectly. There were cold roof issues. Some insulation had to be rearranged and there were venting issues. There was probably a lack of attention stitching them together but it was all minor stuff.”

During Mateosky’s work, other units were found to be in disrepair. “[SMS] didn’t fill our attics with enough insulation to meet code,” said Paul Maurice, another East Kelly homeowner. “Design flaws have caused homes to leak … and damage the outside and interior of walls. Homes that are just four years old shouldn’t do this.”

An inspection of Heather McDonald’s attic revealed black mold caused by improper ventilation. Two independent inspectors found the substance to be a “garden variety” type of non-toxic mold which the Trust bleached out and painted over within weeks.
KM’s fixes managed to cut Campbell’s winter month heating bills in half, but this past winter, ice and snow buildup on the north end of her house was so heavy that the Housing Trust hired a crew to clear her roof on the day the Planet arrived to take photographs.

Campbell said Mateosky’s fixes did not work. Pomeroy said she believes there are a few other small things the Trust can do to mitigate homeowner issues in 12 Pines and Arbor Place but the fact is “[Campbell] might always have to remove snow from the north part of her roof. That might have to be part of her lifelong maintenance of the unit.”

Moving forward
If Campbell doesn’t wish to shovel snow off her roof every winter she can always sell her home back to the Trust. The Trust offered to buy the unit back from her in April 2006. Campbell, however, viewed the offer as a “cop out,” and did not want to lose a rare opportunity to build home ownership equity at such a low interest rate.

If the building continues to experience snow and ice buildup, Cisco sees trouble ahead. “Eventually you are going to start experiencing leaking on the interior if you haven’t already,” he said. “The fact that there is ice on that wall means it is starting to leak somewhere behind the edge of the building.”

Hayden countered, “But she doesn’t have any leaks in her house. If she had a leak on the inside of her house you better believe we’d be over there within 20 minutes of her phone call. You know, we are just trying to do the best we can do for the community and our homeowners. We are not making money hand-over-fist here and there [are] always two sides to the story.”

The ‘he said, she said’ threatens to tarnish the reputation of a non-profit that has built or bought 100 affordable homes in its 18-year history and hopes to build 60 more by 2012. Hayden said the Trust has had to learn as they go.

“We are committed as an organization to be always improving on the design, the development, and the program,” she explained. “Part of what we’ve learned at Kelly Street, and the hard knocks taken there, is being incorporated into our new neighborhood at Glory View [in Melody Ranches].” The Trust has opted to build modulars again, this time with Wardcraft Homes.

“What are we doing to improve upon this process? For one, we’ve hired a general contractor,” Hayden stated. “We have also made choices that are energy efficient [and] that we think will be a benefit to the homeowners over the life of the home, with respect to their ongoing maintenance and repair costs. We are going big on insulation. We are going big on our heating systems and the cold roof design, of course. We are also using healthy materials like low-VOC paints and glues.”

Campbell still wonders when her dysfunctional roof might have her strategically shuffling pots and pans around her bedroom floor. Her home-sweet-homestead might not be as drafty as great-great granddad’s but she will be shoveling SMS mistakes off her roof for years to come.

And she likely won’t soon forget the words Greg Cisco left with her: “The art of making a roof that will work in snow country is pretty simple, but if you screw it up anywhere along the way, well, the proof is up there on your roof.”

Sidebar:
The house that SMS built
Jackson Hole, Wyoming - The Housing Trust’s decision to go with prefab buildings from Superior Modular Systems (SMS) for their 12 Pines and Arbor Place developments on East Kelly was based, in part, on economic sense. Conventional buildings can run about $250 per square foot while modular buildings cost about $100 per square foot. The Trust’s biggest obstacle remained securing a local company that could deliver the 28 units in a timely manner.

 “Trying to find a stick builder to take on this many units at once was nearly impossible,” said the Trust’s Chad Strand. “RAM [construction] did such a good job on Flat Iron, we went to them first but they were too busy.”

When the Housing Trust chose SMS, they thought they were hiring the builder that once erected most of East Jackson. SMS’s ties go back to Boise Cascade who, in addition to being one of the largest pulp mills and lumber harvesters in the country, churned out hundreds of prefab homes in Jackson during the 1970s. In recent history, however, the Idaho company changed hands numerous times.

Roger Herr owned SMS when the Trust contracted with them to build their East Kelly units in 2002. By then, SMS’s reputation was already beginning to fade. “Because of their shoddy work most contractors will not work with them,” said Andy Maurice, a subcontractor who lives in an SMS-built home. “I have talked to many contractors that said they are not welcome in this valley for business anymore.”

Modular Today, an industry trade publication, gave SMS a one-star rating (out of five) after sending a ‘mystery shopper’ to do business with them. “Our mystery shopper reported several issues with their customer service. We are not comfortable with Superior Modular Systems after our mystery shopper had such difficulties with them,” their website states.

Things went from bad to worse when Dave Ochoa bought the Pocatello company in 2006. One prominent contractor in the valley, speaking on the condition of anonymity, said Ochoa may have taken on too much work in an attempt to make the bottom line look attractive to investors. “He ran that company into the ground,” the local builder said. “These are simple boxes. You really can’t screw them up. Ninety-nine percent of the problems are with the onsite stitchers.”

Another local builder who did not wish to be identified said SMS product was decent only as long as you “rode herd on them every step of the way.”
Strand, himself, had a catbird’s seat for assessing SMS. In August 2007, the current construction manager for the Trust went to work for Ochoa and SMS. “Dave bought the company and he asked me to help him because he had grand plans,” Strand remembered. “He looked like he was really going to improve the product and make all these great changes.”

Strand, too, identified onsite stitching as Ochoa’s biggest problem. He urged the SMS owner to hire local hardhats rather than use his own Pocatello crew. “I know he didn’t have enough money to actually do it but, even when I called some people and lined things up, he would never authorize it. He just kept using his same stitch crew from Pocatello,” Strand said.

“I went to all his projects in town and immediately heard all the homeowners in town screaming when I showed up,” Strand continued. “And I thought, ‘I cannot get involved in this. This is a small town.’” Strand quit after two weeks.
So just how hard is it to assemble modular homes after they are unloaded from a truck? “I’ve done a lot of modulars. It’s not rocket science,” said Capstone Construction owner Tim Ciocarlan. “It just takes time to put it together. There is a lot to do and you have to be slow and thorough.”

Dave Leinonen is proof that modulars can work, even ones from SMS. He is currently wrapping up a project for Sean Scarlett right next door to 12 Pines that utilizes SMS boxes with his own design. “Modular is one of the only ways we can address housing costs in this valley,” he said.

During the research of this article, calls to the Pocatello City Building Department confirmed that SMS has gone out of business. City building official Lynn Transtrum, said he was aware that SMS had “closed their doors.”

“This isn’t the first time they’ve done this,” Transtrum said. “They closed down once eight or 10 years ago and resurfaced. Right now, Dave [Ochoa] is trying to hide everything he can hide and I feel bad for the folks who are left waiting in Jackson for product; who are out in the cold with this now.”

Transtrum offered to follow through with inspection paperwork for Jackson builders who are left in the lurch, free of charge. “I’m not going to get my money but there is no sense for me to pass on the pain and anguish,” he said, advising area builders to contact city building official Steve Hockett. Transtrum also confirmed rumors that SMS was being restructured by Jon Zentgraf, calling themselves Sawtooth Custom Homes. Calls there were unreturned.

Paul Dykeman is one of many SMS customers in Jackson left high and dry. “We bought a house from SMS and paid for it and they didn’t deliver the product,” Dykeman said. He said he is out “his life savings.”

When asked if they would line up for a shot at legal action against SMS, Trust Executive Director Ann Hayden said, “We started the line. We have a demand letter into SMS for compensation upwards of $100,000 for repairs on the Kelly Street units. They did not satisfactorily perform or deliver their product.”

Repeated attempts to contact Mr. Ochoa went unanswered and unreturned.

Courtesy photo
Crews remove snow and ice from Campbell's East Kelly home.


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