Cover story II, part II: The house that SMS built

Wednesday, March 12, 2008

By Jake Nichols

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.
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