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Lynette Kronick's backyard resembles the layout of an amphitheater after general contractor American Pacific Builders excavated her garage too deeply on Kronick's Tubbs fire rebuild. The contractor also took dirt out of her backyard to backfill for the garage and left a giant crater, which is one of the many exterior and interior issues the Riebli Valley homeowner has with the contractor. Photo taken Thursday, July 15, 2021. (Kent Porter / The Press Democrat) 2021

‘Like being held hostage’: Tubbs fire survivors now battling their Santa Rosa contractor

John Ghigliazza was exasperated and a little desperate. “I am writing this email,” he informed his contractor, American Pacific Builders, last November, “knowing full well you won’t respond to us.”

It wasn’t always like that. In the beginning, the Santa Rosa-based company known as APB had lavished attention on Ghigliazza and his wife, Angela. After the Tubbs fire swept over their 9-acre property off Mark West Springs Road in October 2017, destroying the main house and a smaller one, the couple were looking for a general contractor to help them put their lives back together.

One builder was especially persistent. Michael Stutes, a former Major League Baseball pitcher whose LinkedIn profile identifies him as a “business consultant” for APB, cold-called them “constantly,” recalled Angela, until the Ghigliazzas decided to work with him and the company’s owner, Steven Bates.

Angela Ghigliazza teaches math at Comstock Middle School, while John has worked for PG&E, mostly in “gas operations,” for nearly three decades. After bringing two sons into the world, the couple decided to “try for a girl,” said John, with a smile. Instead, Angela give birth to twin boys. The four Ghigliazza boys, ranging in age from 23 to 20, now live with their parents in a pair of cramped cabins in Rio Nido, owned by Angela’s parents. Everyone is desperate to get back home. But, three years and nine months after the Tubbs fire, there is no homecoming in sight for them.

John and Angela Ghigliazza in the front room of their almost rebuilt home, Friday, July 16, 2021. The couple’s home was razed by the 2017 Tubbs fire as it swept through their Wikiup area neighborhood. Now the Ghigliazzas are in a dispute with their general contractor, American Pacific Builders.  (Kent Porter / The Press Democrat)
John and Angela Ghigliazza in the front room of their almost rebuilt home, Friday, July 16, 2021. The couple’s home was razed by the 2017 Tubbs fire as it swept through their Wikiup area neighborhood. Now the Ghigliazzas are in a dispute with their general contractor, American Pacific Builders. (Kent Porter / The Press Democrat)

The Ghigliazzas were among more than a dozen families and homeowners, all disgruntled APB clients, who met in Coffey Park on June 22 to compare notes, discuss strategies and share stories about the contractor — like the one about the customer who became so frustrated by her inability to get a phone call returned that she dropped by the company’s offices, where APB called police to have her removed.

Since then, The Press Democrat has talked to 14 unhappy APB clients. Most — unlike the Ghigliazzas — have moved into their houses. Their challenge now, they said, is to persuade the builder to finish the job, to tackle punchlist items and warranty work, which in many cases has languished for more than 12 months even though APB is contractually obligated to take care of it within a year.

APB took on 37 Tubbs fire rebuilds in Santa Rosa, said Jesse Oswald, the city’s chief building official. The company also signed a smaller number of contracts for rebuilds outside the city limits.

Finishing those houses during a pandemic would put a strain on any contractor, Stutes pointed out.

“I don’t know that anyone can claim, no matter what experience they had, that they were prepared for that,” he said.

“From what I’ve seen,” he added, APB has “done nothing but try to honor quite a few requests.”

John Ghigliazza uses his garage as an office that doubles as storage for replaced furniture in his almost rebuilt home that he and his wife, Angela, own. Photo taken Wednesday, July 21, 2021. (Kent Porter/ The Press Democrat)
John Ghigliazza uses his garage as an office that doubles as storage for replaced furniture in his almost rebuilt home that he and his wife, Angela, own. Photo taken Wednesday, July 21, 2021. (Kent Porter/ The Press Democrat)

The wildfires ravaging the North Bay in recent years have led to a surge in complaints against contractors accused of long delays, shoddy work and unethical behavior.

Last year California passed a law, proposed by Sen. Mike McGuire, D-Healdsburg, giving the state’s justice department more authority to prosecute unlicensed contractors and companies that take advantage of those recovering from wildfires and other natural disasters.

At least five APB clients and subcontractors, including the Ghigliazzas, have filed complaints against the company with the Contractors State License Board, which polices the construction industry in California. Many of those clients said they became accustomed to having liens filed against them by subcontractors APB hadn’t paid. A lien is a legal document reserving someone’s right to seek compensation if they haven’t been paid for their work. Liens provide important leverage to stiffed contractors and subcontractors. One APB client was surprised to have a lien placed on his house nine months after he moved in.

Ron Calvi, co-owner of Calvi Construction, told The Press Democrat that APB owes his company “about $156,900” for work performed on “six or seven” jobs.

Deborah Buckman, who works at Hogan Plumbing in Santa Rosa, said of APB, “We currently have them owing us $70,732.”

Blindsided

Steven Bates is the son of William M. Bates, who along with his father made a fortune logging some 3 billion board feet of timber along a 28-mile private road west of Cloverdale in the middle of the last century. In 1981, Steven Bates started his own construction and development company, which “built hundreds of homes and developed or mapped over 2,000 residential home sites,” according to APB’s website.

In 2016, Bates approached Phil Lanterman, a well-regarded construction management consultant, suggesting they form the company that became APB. After helping him build Ravello Estates, a 13-home subdivision just west of the Coddingtown Mall, Lanterman parted company with Bates in 2018.

“I just found that Steve and I weren’t compatible,” said Lanterman, 84. “We did not part on good terms.”

An unfinished stairway leads to the second floor of John and Angela Ghigliazza's home, Friday, July 16, 2021. The home was razed by the 2017 Tubbs fire as it swept through their Wikiup area neighborhood. Now the couple is in a dispute with their general contractor, American Pacific Builders. Because the house is unlivable, the couple resides in Rio Nido for now.  (Kent Porter / The Press Democrat)
An unfinished stairway leads to the second floor of John and Angela Ghigliazza's home, Friday, July 16, 2021. The home was razed by the 2017 Tubbs fire as it swept through their Wikiup area neighborhood. Now the couple is in a dispute with their general contractor, American Pacific Builders. Because the house is unlivable, the couple resides in Rio Nido for now. (Kent Porter / The Press Democrat)

The Ghigliazzas felt blindsided when Bates informed them in February that installation of water, septic and electricity — which APB had signaled on numerous occasions was included in its bid — was not, in fact, included. The couple was forced to come up with an extra $94,000, on top of the $1.46 million they were paying APB to build their house, to have those utilities installed.

The news got worse.

The Ghigliazzas used insurance money to make their first two payments to APB. When those funds were exhausted, they relied on a construction loan from Exchange Bank. Among the terms of the loan: Before the bank cut APB a check, a third-party inspector would first verify the percentage of work completed on the project. Bates signed an addendum to his company’s contract with the Ghigliazzas, agreeing to those terms.

But earlier this month, APB informed the Ghigliazzas that, even though the job wasn’t yet 90% complete, it needed 100% payment or construction would halt. The builder was “asking for $220,000 for work that hasn’t been completed,” said John.

It is against California law for a contractor to collect payment for work not yet finished.

“I am not aware of that taking place,” Stutes said, when asked to comment on APB’s request that the Ghigliazzas make full payment before their project was complete. Such a request, he said, would be “outside any understanding I have of how business is being handled.”

He would be “very upset,” he added, if that were true.

The Press Democrat reached out to Bates numerous times over a 10-day period for this story, by phone, email and text. He did not reply, and instead referred questions to Stutes.

Everything APB has done, Stutes said, has sprung from its “intention of restoring the local community.”

“We’re trying to finish people’s houses,” he said.

"The birds moved in before we did," John and Angela Ghigliazza said, referring to a nest that was built on a ceiling fan at their rebuilt home. The couple’s home was razed by the 2017 Tubbs fire, and now they are in a dispute with their general contractor, American Pacific Builders. Photo taken Friday, July 16, 2021. (Kent Porter / The Press Democrat) 2021
"The birds moved in before we did," John and Angela Ghigliazza said, referring to a nest that was built on a ceiling fan at their rebuilt home. The couple’s home was razed by the 2017 Tubbs fire, and now they are in a dispute with their general contractor, American Pacific Builders. Photo taken Friday, July 16, 2021. (Kent Porter / The Press Democrat) 2021

The Ghigliazzas would love to see theirs finished. But the bank won’t let them pay for work not yet performed. In the meantime they’ve hired a lawyer, and filed a complaint with the Contractors State License Board, which confirmed to The Press Democrat that it is investigating APB, although “there is no timeline” for when that might be finished, said Joyia Emard, a spokesperson for the board. The CSLB is notoriously understaffed and slow-moving. Its investigation of APB isn’t likely to be completed for months. The couple also filed a complaint against APB with the Better Business Bureau.

The Ghigliazzas recently asked APB to release their permit so they can get another builder to finish the house. The contractor refused. This process, John said, has made him “feel like we’re being held hostage. They’re hoping we’re going to fold, to cave in to them, and give them what they want.”

Calling the cops on a client

Many APB customers found that, over time, it became more of a struggle to get their calls and emails returned. At wit’s end one day in the spring of 2020, Debbie Johnson and her niece walked into the company’s offices on Guerneville Road. Johnson explained that she was a client — APB was rebuilding her Coffey Park house — hoping to get some answers. During her tense exchange with Bates, someone in the office called the police. The responding officers talked to Johnson but did not arrest her.

Her husband, Don Johnson, has a four-decade background in construction. He frequently stopped by the job site and often was alarmed by what he saw. “There were so many things wrong,” he said, “and it was always somebody else’s fault.”

Don and Debbie Johnson in their rebuilt Coffey Park home on Friday, July 16, 2021. Among the issues with their contractor American Pacific Builders was the amount of gravel left behind in the front and backyards, including nails, concrete and construction debris. Other issues plague the house, such as uneven walls, poorly designed fencing and other structural and cosmetic issues.  (Kent Porter / The Press Democrat)
Don and Debbie Johnson in their rebuilt Coffey Park home on Friday, July 16, 2021. Among the issues with their contractor American Pacific Builders was the amount of gravel left behind in the front and backyards, including nails, concrete and construction debris. Other issues plague the house, such as uneven walls, poorly designed fencing and other structural and cosmetic issues. (Kent Porter / The Press Democrat)

Our only recourse is to sue’

In the spring of 2020, the city of Santa Rosa signed off on the final permit for the Johnsons’ house. To be on the safe side, they brought in an independent inspector, who found problems the city had missed. When those issues were brought to the city’s attention, the building department sent out one of its senior inspectors. After crawling under the house, the inspector found “some deficiencies,” said Oswald, the chief building official, including “some floor joist problems, a gable truss problem, some floor structure issues, and some grading and drainage issues. In other words, the site needed to be properly graded to ensure drainage away from the house.”

Oswald promptly rescinded the final permit on the house until APB fixed those problems, which took the company another 2½ months. Even after the final permit was restored, said Johnson, “they didn’t fix everything.” At first, the couple withheld the last 20% of their payment, in hopes that APB would take care of what Johnson said were those outstanding items. But the builder would not hand over keys.

Finally, in September, Johnson recalled, “our attorney said ‘just pay him, and move in, and we’ll fight him once you get in there.’”

“We’re at the point now,” said Johnson, “where they violated the contract, they refused to go to mediation” — which the contract calls for — “refused to do warranty work. Our attorney says now our only recourse is to sue ‘em for damages, attorney’s fees and repairs.”

Don Johnson digs through layers of gravel to plant sunflowers, Friday, July 16, 2021. Among the issues with his contractor American Pacific Builders is the amount of gravel left behind in the front and backyards, including nails, concrete and construction debris. Other issues plague the house,such as uneven walls, poorly designed fencing and other structural and cosmetic issues.  (Kent Porter / The Press Democrat)
Don Johnson digs through layers of gravel to plant sunflowers, Friday, July 16, 2021. Among the issues with his contractor American Pacific Builders is the amount of gravel left behind in the front and backyards, including nails, concrete and construction debris. Other issues plague the house,such as uneven walls, poorly designed fencing and other structural and cosmetic issues. (Kent Porter / The Press Democrat)

Mice, mold and a subpar sink

On the advice of Debbie Johnson, Mary Rogers hired an independent inspector to give her ABP-built home a closer look, even though the Coffey Park house had already been “finaled” by the city. That inspector found mold under her home, which Rogers believes was a result of the contractor’s failure to insulate under the house or install a vapor barrier.

She is grateful that APB remedied that situation, once it was pointed out to them, and looks forward to the day the builder gets around to repairing the section of sidewalk, bordering her house, that it tore up two years ago to connect water utilities. “They claimed it wasn’t them,” said Rogers. “I had to do my own research to find out that, yes, APB pulled the permit for this in 2019, and just never dealt with it.”

Almost two years after 80-year-old Stella Agudelo moved back into her home, her daughter, Adriana Call, is still pleading with APB to complete the warranty work on the house. “Once they turned the keys over to us,” she said, “they were done with us. But contractually, they were not done with us. We have had to fight for every single little thing.”

Lynette Kronick's backyard resembles the layout of an amphitheater after general contractor American Pacific Builders excavated her garage too deeply on Kronick's Tubbs fire rebuild. The contractor also took dirt out of her backyard to backfill for the garage and left a giant crater, which is one of the many exterior and interior issues the Riebli Valley homeowner has with the contractor. Photo taken Thursday, July 15, 2021.  (Kent Porter / The Press Democrat)
Lynette Kronick's backyard resembles the layout of an amphitheater after general contractor American Pacific Builders excavated her garage too deeply on Kronick's Tubbs fire rebuild. The contractor also took dirt out of her backyard to backfill for the garage and left a giant crater, which is one of the many exterior and interior issues the Riebli Valley homeowner has with the contractor. Photo taken Thursday, July 15, 2021. (Kent Porter / The Press Democrat)

One such item: When the garage door is closed, there’s a gap visible between the door and driveway. Mice and frogs have found their way into the garage, said Call, who added, “They’re going to have to break out the old cement and redo a portion of the driveway.” Like Rogers, she intends to file a complaint against APB with the Contractors State License Board.

Nor did APB get Lynette Kronick’s garage right on the first try. After mistakenly digging too deep a hole for the garage of her Riebli Valley house, the builder then had to fill much of that area back in. That explains the crater the contractor left in her backyard, Kronick said.

“If I had more money,” she joked, “I could turn it into a small concert venue.”

But for the most part, she said, “I’m very happy with my house. It’s done, and I’m in it.” That said, “there are some things that are not the way they should be.” Those include square pillars in front of the house, where the plans had called for round columns. And there is the sad story of the disappointing sink.

Invited to select a kitchen sink, Kronick chose the model she’d owned before the fire. APB informed her that that particular sink had been discontinued. She settled for a smaller, cheaper sink, only to learn after calling Signature Hardware, the manufacturer of her preferred sink, that it had not been discontinued. “I got mad at that point,” she said.

While generally pleased with how her house ended up, Kronick was left scarred, she said, by “the process” of working with APB, “the pain and lies and slow work and lack of communication.”

Lynette Kronick's front entrance columns were supposed to be round, but general contractor American Pacific Builders installed square pillars, which is one of the many issues that the Riebli Valley homeowner has with the contractor rebuilding her Tubbs fire home. Photo taken Thursday, July 15, 2021.  (Kent Porter / The Press Democrat)
Lynette Kronick's front entrance columns were supposed to be round, but general contractor American Pacific Builders installed square pillars, which is one of the many issues that the Riebli Valley homeowner has with the contractor rebuilding her Tubbs fire home. Photo taken Thursday, July 15, 2021. (Kent Porter / The Press Democrat)

Their house, not ours’

Shortly after she moved back into her Dogwood Drive home in Coffey Park, Katya Robinson was awakened in the middle of the night by the smoke alarm in the master bedroom. Lacking a ladder, she used a broom to knock the alarm off the ceiling. Water then came pouring through the hole where the alarm had been — the result of an improperly installed air conditioning unit, which APB was quick to fix.

Despite the problems, which include concrete chipping in the backyard, and having been served papers informing her that a local lumber store had put a lien on the house, and minor fixes she’s done herself since moving in, Robinson, too, is happy with her house. “It’s better than the old house,” she said.

Just around the corner on Banyan Street, Linda Jacobson had a similar leak in her ceiling. Her backyard fence is starting to lean, and scores of nails protrude through the underside of the eaves — the roofers apparently having run out of roofing nails. Sections of the floor need to be restored, because it wasn’t covered with a protective layer while workers finished the rest of the house. She can live with all that, she said. She’s glad to be home.

What makes her a little sad, Jacobson then added, are the doors that open onto the back deck. She’d picked out a pair of glass doors which, at 9 feet, would have been level with the top of the bay window. But the doors she got were smaller, a different style. When she pointed out the mistake to APB, “they told me, ‘No, that’s a different plan.’ They were telling me there were two different plans,” she recalled.

“I think they just put in the doors they had.”

Ray Wilson recalled stopping by the job site where APB was rebuilding his Coffey Park house to find a subcontractor moving floorboards from his truck into Wilson’s garage. But it wasn’t the flooring the Wilsons had requested, and that APB had signed off on.

“Is that for somebody else?” Wilson asked. No, the young man replied. This is your flooring.

No it isn’t, said Wilson, who directed the subcontractor to put the boards back in his truck. A half hour later, Wilson got a call from someone at APB assuring him that the flooring he’d just refused had been “an upgrade.”

No, it’s not, he told them. The flooring he’d originally chosen “was expensive, and they didn’t want to put it in. So they tried to pull a fast one.”

At times, he said, “it felt like they were building their house, not ours.”

The garage slab attached to the home of John and Angela Ghigliazza has developed large cracks in a half dozen places. The home was razed by the 2017 Tubbs fire as it swept through their Wikiup area neighborhood. Now the Ghigliazzas are in a dispute with their general contractor, American Pacific Builders.  (Kent Porter / The Press Democrat)
The garage slab attached to the home of John and Angela Ghigliazza has developed large cracks in a half dozen places. The home was razed by the 2017 Tubbs fire as it swept through their Wikiup area neighborhood. Now the Ghigliazzas are in a dispute with their general contractor, American Pacific Builders. (Kent Porter / The Press Democrat)

Part of APB’s struggles can be chalked up to the challenges of completing projects during COVID-19. Despite a green light from the county allowing construction to proceed on fire rebuilds, even at the height of the pandemic, work slowed on many houses, not just the ones APB was building.

Those delays were quite prolonged, in some cases. It took APB 2½ years to finish the Coffey Park home of Ellen Lenchner. “They took their sweet-ass time,” she said. Single and retired, she ended up paying rent and mortgage out of her own pocket for 19 months after her insurance money ran out. How did she do it? “I’m in debt up to my eyeballs,” she said. “But I’m home.“

Lack of experience

Wilson and Johnson, who have decades of construction experience, believe that APB, with its background in subdivisions, may have been hindered by its lack of experience building custom homes.

“Subdivisions are productions, like an assembly line,” said Lanterman, Bates’ ex-business partner.

“Once you get the first two or three done, you should be able to get the rest of them right.”

When it comes to custom homes, however, “you’ll get your head handed to you on a platter if you don’t pay attention.”

Mark Gnat, who worked for APB as an on-site superintendent for half a year, said its “organization was sloppy, at best.” APB’s office, he said, was understaffed for the number of projects the company took on, leading to “a lot of loose ends and black holes.”

He left the company because he got tired of seeing homeowners and subcontractors “getting the raw end of the stick.”

“I’ve known them for a long time, and we have a working relationship,” said Gnat of the people at Calvi Construction and Hogan Plumbing. “You don’t screw over your best guys, you know?”

A bitter pill

During an unscheduled visit to their property one morning in February, the Ghigliazzas noticed that Bates, who they said had been ghosting them, was already there. So they posted up at the gate, where he’d have to stop and talk to them on his way out.

When Bates got out of his truck, John got right to the point: “What is going on with our electric, our water and our septic? Where does that stand? What’s your plan?”

The contract they signed says nothing about connecting the utilities, according to the Ghigliazzas. For a year and a half, however, in all their conversations and visits to the job site with APB, “there was never, ever a time when they said, ‘You know, you’re going to have to cover this,’ or ‘It’s your responsibility to get the utilities down to the house,’” said John.

In their numerous exchanges with APB about septic tanks, for instance, the Ghigliazzas often raised the possibility of installing a larger tank, and paying the builder for the extra cost. “And no one ever said, ‘What do you mean the extra cost — you’re covering ALL the cost,’” John noted.

“I want people to know who this company is,” John Ghigliazza said. “I don’t want this to happen to anyone else.”

Until that February morning, when Bates looked at the couple and told them, “I never bid that. I only bid to build your house.”

“I looked at him,” recalled John, “and I said, ‘You’re a goddamn crook.’”

For Bates to spring that on him, “two years into this ordeal,” John said, “that was a tough pill to swallow.”

After explaining that “I can’t speak to any of the contractual stuff,” Stutes pointed out that “a number of plans” for the houses they’re building “came in with lots of missing information.”

“If there was an oversight or miscommunication,” he said, “from everything I know, nothing was done intentionally or to deceive them.”

That’s cold comfort to the Ghigliazzas. But they’ll keep holding out in those Rio Nido cabins, which get smaller by the day, because the principle is important. They’re happy to draw attention to their plight, even if APB doesn’t budge.

“I want people to know who this company is,” John said. “I don’t want this to happen to anyone else.”

You can reach Staff Writer Austin Murphy at 707-521-5214 or austin.murphy@pressdemocrat.com or on Twitter @ausmurph88.

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