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

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.”

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 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.”

‘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.”

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.”

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.”

‘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.”

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.

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.