Liens Multiply Against Builder: Millions Sought From St. Lawrence
By Jack Hagel, The News & Observer, Raleigh, N.C.
Dec. 19--RALEIGH -- Financial pressures are mounting for a major Triangle homebuilder, with hundreds of legal claims filed against its properties and a suit by the owner of the Carolina Hurricanes seeking more than $200,000.
More than three dozen companies seek millions of dollars from St. Lawrence Homes for building materials, landscaping, framing, paving and scores of other services. The Raleigh company built hundreds of houses throughout the state during the housing boom, but now is grappling with sluggish home sales.
It's the latest indicator of how the housing slump, which is punishing builders, is rippling through a broader swath of the Triangle economy.
Contractors and suppliers have filed at least 400 liens -- monetary claims that must be settled before a residential or commercial property is sold -- against properties still owned by St. Lawrence, according to court records in Durham and Wake counties.
If those companies don't get paid, it could force them to cut costs or hurt their ability to pay workers.
Even Gale Force Sports & Entertainment, the owner of the Carolina Hurricanes, is piling on. Gale Force on Tuesday sued St. Lawrence, saying the homebuilder is delinquent in paying $217,045 for advertisements throughout the team's west Raleigh arena, the RBC Center. The contract, signed in 2005, was to expire at the end of this season.
"St. Lawrence paid sums for the 2005, 2006 and part of the 2007 seasons," but the company has refused to pay a balance from last season, and for this season, Julia R. Wicker, a lawyer for Gale Force, wrote in the complaint.
Neither Wicker nor Bob Ohmann, president and founder of St. Lawrence Homes, returned messages seeking comment.
The lawsuit indicates a fall from grace for St. Lawrence, the company that in April gave away a $340,000 home at a Hurricanes hockey game. It also underscores how rapidly the Triangle housing industry -- which back then was deemed largely protected from the nation's housing woes -- has fallen ill in an era of tight lending.
"All the builders are being hit by the same storm," said Jim Anthony, president of Anthony & Co., a Raleigh real estate services company. "Buyers are staying home. Lenders have changed their standards. Consumers have no confidence right now in the economy, and the loans that the builders depend on to build are being called."
Monthly home sales fell in the Triangle to an eight-year low in November. Tony golf developments have fallen into foreclosure. Developers, land planners and contractors have gone bankrupt. And bankruptcy lawyers say more bankruptcies are expected.
Builders' bills stack up
Indeed, St. Lawrence isn't the only builder facing mountains of bills. More than 100 liens have been filed against Wake properties owned by Portrait Homes and Perry Builders.
At least 13,057 lien claims have been filed against properties in Wake and Durham counties this year. That total, a five-year high, is up 32 percent from last year.
When liens pile up for developers and contractors, "it means there's a fundamental problem in their business or industry," said David M. Warren, a bankruptcy lawyer at Poyner Spruill. "And that can be a problem with income or expenses. Either your income [is too low] or your expenses are too great. ... In this situation, it's probably the sales have faltered."
Often, the remedy is bankruptcy or liquidation, Warren said.
Big bets on the fringes
St. Lawrence, founded in 1989, became one of the region's biggest developers of entry-level and move-up homes.
"They are well respected, well regarded, quality home builder that is known as an old reliable for our market and also one of the largest," Anthony said. "With the slowdown hitting as hard as it has, I'm not surprised to learn that even a great homebuilder has been hammered."
St. Lawrence, which also has communities in Charlotte; Wilmington; and Cincinnati, Ohio; made big bets on the fringes of this region. It snapped up land in towns such as Fuquay-Varina, Knightdale, Rolesville and Wake Forest, where it hoped to lure buyers who were priced out of the most popular neighborhoods in Cary and Raleigh when easy lending fueled a boom.
St. Lawrence now offers the American dream in at least 15 subdivisions, such as American Village in Durham, The Villages at Beaver Dam in Knightdale and Tillington at the Villages of Rolesville.
But as the housing market has slowed, a shrinking pool of buyers has more choices closer to this region's main cities.
"It leaves those alternatives, those peripheral areas, out to dry," said Stacey P. Anfindsen of Cary-based Birch Appraisal Group. If you're a builder out there, he added, "it puts you in a lot of trouble."
jack.hagel@newsobserver.com or 919-829-8917
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Not your typical NC neighborhood feel, no waves, no smiles...
. I really liked this house, the floor plan and the upgrades, but it is probably not a good idea to buy it now..too bad it is such a nice community. I was looking on their website, and there is no mention of them going under. They seem like a good builder, but I guess in tough economic times nobody is spared. Hopefully it will turn around soon.
Our house
