June 1, 2012
Todays Homes’ troubled townhome project in northeast Colorado Springs triggered the company’s financial collapse and shutdown — and could lead to the razing of the buildings, the head of Todays Homes’ Canadian parent company said Friday.
In his first public comments since Todays Homes closed its doors May 4, Unity Builders Group President and CEO Tom Chisholm told The Gazette that the builder had agreed to sell nine of 10 townhomes in a trio of buildings that were part of the Dublin Terrace Townhouses, west of Powers and Dublin boulevards.
But the buildings were constructed 7 feet too high, putting them in violation of a development plan for the project. That prompted a spat of complaints from neighbors who said the buildings overshadowed their homes, and a demand by Colorado Springs city officials that the problem be corrected.
Todays Homes officials agreed to move the three buildings, but that left the company unable to complete the sale of the nine townhomes, Chisholm said. Without cash from the sale of the townhomes, the company defaulted on a bank loan, couldn’t draw more money from its lender and couldn’t pay bills or make payroll — leading to an abrupt shutdown, he said.
Calgary-based Unity Builders, meanwhile, was having its own financial problems independent of Todays Homes, and was heading to court in Canada to seek protection from its creditors, Chisholm said. As a result, the company’s funds were legally frozen and Unity couldn’t infuse Todays Homes with cash, he said.
Chisholm said that Colorado Springs city planners refused to grant a waiver to allow the townhomes to remain in place.
“I just don’t understand why there’s not a hardship here for any kind of a variance,” Chisholm said.
He said he spoke with planners about 10 days ago, but they wouldn’t budge; even though Todays Homes had closed its doors by then, there still was a possibility the townhomes could have been sold to existing or new buyers if a solution — perhaps enhanced landscaping — could have been found to allow the buildings to remain, Chisholm said.
If units had been sold, Todays Homes’ lender PNC Bank of Pittsburgh and subcontractors on the project could have been paid, and the company could have revived the development, Chisholm said.
Still, he said, city officials declined his request to bring the project back to the negotiating table.
City planners couldn’t be reached for comment.
Chisholm acknowledged Todays Homes messed up and should have recognized its error on the too-tall townhomes.
“It would have been nice if we had caught it,” he said. “I’m not trying to place blame. I think if we’ve got a team there that’s meant to build houses right, and under code, then they should be doing that.”
Chisholm said he expects PNC Bank to eventually foreclose on its loan and take possession of the buildings. That means PNC will have to decide what to do with them, he said.
Moving the buildings wouldn’t be easy because land next to the existing townhomes, which is part of the overall townhome project, is controlled by a lender other than PNC, Chisholm said. Also, a move would be costly, and it’s uncertain whether only the buildings would be moved or if foundations would have to go, too, he said.
Chisholm speculated the buildings could be torn down, although he stressed he wasn’t speaking for PNC. Officials in PNC’s corporate office couldn’t be reached for comment.
“They might just have to be torn down and put into a dump,” Chisholm said of the buildings. “I don’t know how green Colorado is, but that’s very likely where they could end up.”
Chisholm also said he doesn’t know what will happen to homebuyers who put down money on Todays Homes properties and are wondering about their earnest money; he’s referring questions to Unity’s attorney. Subcontractors who worked on the project and haven’t been paid might become creditors in Unity’s court filing in Canada, he said.
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