Leader Blues

Wednesday, January 09, 2008

TOP STORY>> Air base housing still lacks contract

By JOHN HOFHEIMER
Leader staff writer

No developer has yet been named to take over the failed effort to privatize, build, rehabilitate and manage hundreds of homes at Little Rock Air Force Base, but the developers have finally begun paying some of the local contractors who have claimed they were owed hundreds of thousands of dollars.

American Eagle Communities LLC, the previous developer, has settled with 25 of 33 unpaid contractors and has released funds to 18 of those who have signed release forms and will settle without litigation, according to Michael Teague, a spokesman for Sen. Mark Pryor. Teague said 14 of those 18 subcontractors had been sent checks and two more are being processed.

JR Construction of Cabot, which says it’s owed $136,000, is not among those that have settled, according to Teague.
“They are tied up in pretty difficult litigation,” he said.

“Obviously, we would like for each participant to be made whole and we’ll assist in any way we can,” Teague said. “We know that some may not be satisfied and a resolution may require litigation, but we feel like we got the ball rolling and some payments are being made.”

The LRAFB project was closed down May 7 after it became clear American Eagle would be unable to make good on its end of the ambitious 50-year deal.

The company had completed only 25 of the more than 400 new homes it had promised to build and a sea of slabs padlocked behind a chain-link fence awaits further development.

American Eagle also quit or was locked out of similar projects it had won at Moody, Hanscom and Patrick Air Force bases.

At the end of November, on the same day Pryor and Sen. Saxby Chambliss of Georgia announced that they were calling for an investigation into the awarding of the American Eagle contracts and more controls for future contracts, American Eagle Communities LLC suddenly announced that it would pay about $778,000 of the $2.4 million the company allegedly owes contractors and suppliers for its now-abandoned housing-privatization contract at Little Rock Air Force Base.

“I’ll believe it when I see the check,” said Jack Sullivan, an officer iof JR Construction of Cabot, one of the contractors awaiting back pay.

American Eagle Communities, and their principals—Carabetta Enterprises and Shaw Infrastructures—defaulted on privatization projects of thousands of homes on the four air force bases, including about 1,200 at Little Rock and the Air Force, the Bondholders and American Eagle representatives have been meeting for months trying to sell a smaller version of the project to other developers.

The Leader first broke this story in April, when reports surfaced that Carabetta Enterprises, which was managing partner of American Eagle Communities, LRAFB Family Housing, owed contractors perhaps hundreds of thousands of dollars.

Work on building 468 new housing units and remodeling 732 existing units at LRAB stopped May 7 when the lenders pulled the plug on funding the project, already two years behind schedule.

Work has ceased as well at Magnolia Family Housing at Moody Air Force Base in Georgia, at Patrick Air Force Base in Florida and at Hanscom Air Force Base in Massachusetts.

Lenders, the Air Force and American Eagle are negotiating with two companies to take over scaled-down projects from the Carabettas at all four bases.

Now, the Air Force and American Eagle have decided to part ways and are looking for new bidders on a four-base project that has shrunk from nearly 3,000 to 1,767 homes, according to a recent article in Air Force Times.

American Eagle has sold its interest in nearly 3,000 Puget Sound, Wash., Navy homes to the Forest City Company of Cleveland. Forest is one of two developers currently negotiating to take over the four failed Air Force jobs, according to Brig. Gen. Rowayne Schatz.

The other is Pinnacle and Hughes.

A new contract to revitalize the project could be signed by mid January, according to the general.

One contractor reported that an expected deal for a new developer to take over had fallen through, but representatives of Little Rock Air Force Base, the U.S. Air Force, Sen. Mark Pryor’s office and Cong. Vic Snyder’s office all say they haven’t heard that.

The new contractor was to have been announced Tuesday, according to Staff Sgt. Kati Garcia, a public affairs specialist for Little Rock Air Force Base, and could be announced Thursday.

“It’s our understanding that the Air Force has been working to sign a new contract soon,” said a congressional aide Tuesday afternoon, “but we are not privy to the negotiations. We are checking to see if a breakdown has occurred, but can’t confirm that at this time.”

Pryor said Tuesday morning that he believes a new developer would be named by the end of the month or beginning of February.

Snyder’s office said Snyder expected a new contract to be awarded soon.

Schatz said that even if a new developer were signed soon, it would probably be the summer of 2009 before work restarted in earnest.